Java Jolt purchases and roasts high-quality, whole-bean coffees, its hallmark, and sells them, along with other coffee-related products primarily through its company-operated retail stores. Suppose that the quality-control manager at Java Jolt discovered a 1,200-pound batch of roasted beans that did not meet the company's quality standards. Company policy would not allow such beans to be sold with the Java Jolt name on them. However, they could be reprocessed, at which time they could be sold by Java Jolt's retail stores, or they could be sold as is on the wholesale coffee bean market.

Assume that the beans were initially purchased for $1,400, and the total cost of roasting the batch was $1,100,including $ 300 of variable costs and $ 800 of fixed costs (primarily depreciation on the equipment). The wholesale price at which Java Jolt could sell the beans was $ 3.70 per pound. Purchasers would pay the shipping costs from the Java Jolt plant to their individual warehouses. If the beans were reprocessed, the processing cost would be $1,080 because the beans would not require as much processing as new beans. All $1,080would be additional costs, that is, costs that would not be incurred without the reprocessing. The beans would be sold to the retail stores for$ 5.15 per pound, and Java Jolt would have to pay an average of $ 0.15 per pound to ship the beans to the stores.

	Sell as is	Process further
Total Revenue
Less: Additional processing costs
Shipping Costs
Net Revenue