1. Abica Coffee Company produces Columbian coffee in batches of 5,400 pounds. The standard quantity of materials required in the process is 5,400 pounds, which cost $6.00 per pound. Columbian coffee can be sold without further processing for $8.40 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 $13,550 per batch. The additional processing will also cause a 5% loss of product due to evaporation.

   Question Content Area

   a. Prepare a differential analysis report for the decision to sell or process further.

   Abica Coffee Company Proposal to Process Columbian Coffee Further Differential Analysis Report

   Differential revenue from further processing per batch:
   Additional cost of producing Decaf ColumbianDecaf Columbian per batchDifferential revenueRevenue from sale of Decaf Columbian	$- Select -
   Additional cost of producing Decaf ColumbianDecaf Columbian per batchDifferential revenueRevenue from sale of Columbian coffee	- Select -
   Differential revenueDifferential expense		$- Select -
   Differential cost per batch:
   Additional cost of producing Decaf ColumbianDecaf Columbian per batchDifferential revenueRevenue from sale of Columbian coffeeRevenue from sale of Decaf Columbian		- Select -
   Differential income from further processing Decaf Columbian per batchDifferential loss from further processing Decaf Columbian per batch		$- Select -

   Question Content Area

   b. Should Abica Coffee sell Columbian coffee or process further and sell Decaf Columbian?

   Yes, process further and sell decaf ColumbianNo, sell Columbian coffee

   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. $fill in the blank e2f6e9f9ef85044_2 per pound

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