Cocoalicious processes cocoa beans into cocoa powder at a processing cost of $11,000 per batch. Cocoalicious can sell the cocoa powderas-is, or it can process the cocoa powder further into chocolate syrup or boxed assorted chocolates. Onceprocessed, each batch of cocoa beans would result in the following salesrevenue:

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The cost of transforming the cocoa powder into chocolate syrup is $72,000. Likewise, the company would incur $177,000 to transform the cocoa powder into boxed chocolates. The company president has decided to make boxed chocolates owing to its high sales value and to the fact that the $11,000 cost of processing cocoa beans"eats up" most of the cocoa powder profits. Has the president made the right or wrongdecision? Explain your answer. Be sure to include the correct financial analysis in your response.

Complete the following incremental analysis to compare selling the cocoa powder as is with processing it further. (Leave any unused cellsblank.)

Sell as

Sell as

Sell as Boxed

Cocoa

Chocolate

Assorted

Powder

Syrup

Chocolates

Additional processing costs

Less:

Contribution margin

Net benefit