=+EX 25-10 Sell or process further obj. 1

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a. $205 Seattle Roast Coffee Company produces Columbian coffee in batches of 8,000 pounds.

The standard quantity of materials required in the process is 8,000 pounds, which cost

$5.00 per pound. Columbian coffee can be sold without further processing for $10.80 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12.50 per pound. The processing into Decaf Columbian requires additional processing costs of $10,500 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.