Chocolicious processes cocoa beans into cocoa powder at a processing cost of $10,300 per batch. Chocolicious can
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Cocoa powder.....................................$ 14,500
Chocolate syrup................................... 104,000
Boxed assorted chocolates.................. 196,000
The cost of transforming the cocoa powder into chocolate syrup would be $67,000. Likewise, the company would incur a cost of $179,000 to transform the cocoa powder into boxed assorted chocolates. The company president has decided to make boxed assorted chocolates due to their high sales value and to the fact that the cocoa bean processing cost of $10,300 eats up most of the cocoa powder profits. Has the president made the right or wrong decision? Explain your answer. Be sure to include the correct financial analysis in your response.
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Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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