Question
Rise N Shine Coffee Company produces Columbian coffee in batches of 6,700 pounds. The standard quantity of materials required in the process is 6,700 pounds,
Rise N Shine Coffee Company produces Columbian coffee in batches of 6,700 pounds. The standard quantity of materials required in the process is 6,700 pounds, which cost $5 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $13,852 per batch. The additional processing also causes a 5% loss of product due to evaporation.
a. Prepare a differential analysis dated October 6 on whether to Sell Regular Columbian (Alternative 1) or Process Further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis | |||
Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2) | |||
October 6 | |||
Sell Regular Columbian (Alternative 1) | Process Further into Decaf Columbian (Alternative 2) | Differential Effects (Alternative 2) | |
Revenues | $fill in the blank 68b5a8067060fe4_1 | $fill in the blank 68b5a8067060fe4_2 | $fill in the blank 68b5a8067060fe4_3 |
Costs | fill in the blank 68b5a8067060fe4_4 | fill in the blank 68b5a8067060fe4_5 | fill in the blank 68b5a8067060fe4_6 |
Profit (loss) | $fill in the blank 68b5a8067060fe4_7 | $fill in the blank 68b5a8067060fe4_8 | $fill in the blank 68b5a8067060fe4_9 |
b. Should Rise N Shine sell Columbian coffee or process further and sell Decaf Columbian?
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 two decimal places. $fill in the blank b4c15ffaffdf013_2 per pound
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