Abica Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Abica Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $6.00 per pound. Columbian coffee can be sold without further processing for $6.40 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.00 per pound. The processing into Decaf Columbian requires additional processing costs of $11,350 per batch. The additional processing will also cause a 5% loss of product due to evaporation. a. Prepare a differential analysis report for the decision to sell or process further. Abica Coffee Company Process Columbian Coffee Further Differential Analysis Report Differential revenue from further processing per batch: Revenue from sale of Decaf Columbian Revenue from sale of Columbian coffee 66,000 X -2,400 X Differential revenue Differential cost per batch: Additional cost of producing Decaf Columbian Differential income from further processing Decaf Columbian per batch Feedback Check My Work a. Follow Exhibit 10 in the text. For both products, subtract the costs from the revenues. Determine the differential effect on the revenues, costs, and income (loss). b. Should Abica Coffee sell Columbian coffee or process further and sell Decaf Columbian? Yes, process further and sell decaf Columbian c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to the nearest cent. per pound $ Abica Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $6.00 per pound. Columbian coffee can be sold without further processing for $6.40 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.00 per pound. The processing into Decaf Columbian requires additional processing costs of $11,350 per batch. The additional processing will also cause a 5% loss of product due to evaporation. a. Prepare a differential analysis report for the decision to sell or process further. Abica Coffee Company Process Columbian Coffee Further Differential Analysis Report Differential revenue from further processing per batch: Revenue from sale of Decaf Columbian Revenue from sale of Columbian coffee 66,000 X -2,400 X Differential revenue Differential cost per batch: Additional cost of producing Decaf Columbian Differential income from further processing Decaf Columbian per batch Feedback Check My Work a. Follow Exhibit 10 in the text. For both products, subtract the costs from the revenues. Determine the differential effect on the revenues, costs, and income (loss). b. Should Abica Coffee sell Columbian coffee or process further and sell Decaf Columbian? Yes, process further and sell decaf Columbian c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to the nearest cent. per pound $
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Abica Roast Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.00 per pound. Columbian...
-
11. What is the Specific Gravity of Zinc ? 12. The barometric pressure for the day is 14.7 psi. The hangar shop air tank gage reads 120 psi. What is the absolute pressure inside the shop air tank? =...
-
Polaski Inc. uses an actual cost, job order system. The following transactions are for August 2010. At the beginning of the month, Direct Material Inventory was $2,000, Work in Process Inventory was...
-
Name and explain two allocation rules and two allocation keys. Why are allocation rules and keys important to lower-level management? If you were a site manager in a chemical company, with a single...
-
At the end of the year, Email Enterprises estimates the uncollectible accounts expense to be 0.8 percent of net sales of $7,575,000. The current credit balance of Allowance for Uncollectible Accounts...
-
Sanchez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2020 is as follows: (Click to view the operating income for the...
-
Read the Case Study: https://www.studocu.com/en-us/document/the-university-of-adelaide/portfolio-theory-management-iii/lecture-notes/braeburn-case/8837071/view In January 2018 when this evaluation...
-
As a follow-up, you understand that Mr. Quincy felt crushed by his credit card and mortgage debt, is that right?
-
Sort the West Roxbury data by YR BUILT and report any anomalies. Discuss the implications for the analysis done in this chapter, and possible steps to take
-
In this exercise, you will recreate some of the analysis done in this chapter for the COMPAS recidivism case, using the data in COMPAS-clean.csv. After partitioning the data into training and...
-
Laptop Sales at a London Computer Chain: Interactive Visualization. The next exercises are designed for using an interactive visualization tool. The file LaptopSales.csv is a comma-separated file...
-
What red flag symptoms might revenue recognition create and how might one best discover a revenue recognition fraud?
-
Write a brief outline and thesis draft on the topic Poverty in Africa.
Study smarter with the SolutionInn App