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Chocolite processes cocoa beans into cocoa powder at a processing cost of $10,200 per batch. Chocolite can sell the cocoa powder as is, or
Chocolite processes cocoa beans into cocoa powder at a processing cost of $10,200 per batch. Chocolite can sell the cocoa powder as is, or it can process the cocoa Kpowder further into chocolate syrup or boxed assorted chocolates. Once processed, each batch of cocoa beans would result in the following sales revenue: (Click the icon to view the sales revenue.) The cost of transforming the cocoa powder into chocolate syrup would be $72,000. Likewise, the company would incur $179,000 to transform the cocoa powder into boxed assorted chocolates. The company president has decided to make boxed assorted chocolates owing to its high sales value and to the fact that the $10,200 cost of processing cocoa beans "eats up" most of the cocoa powder profits. Has the president made the right or wrong decision? Explain your answer. Complete the following incremental analysis to compare selling the cocoa powder as is with processing it further. (Enter a "0" for any zero amounts.) Sell as Less: Net benefit Sell as Cocoa Powder Sell as Chocolate Syrup Assorted Chocolates
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