Sell or Process Further Abica Coffee Company produces Columbian coffee in batches of 5,800 pounds. The standard quantity of materials required in the process is 5,800 pounds, which cost $5.00 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 $10.00 per pound. The processing into Decaf Columbian requires additional processing costs of $10,750 per batch. The additional processing will also cause a 5% loss of product due to evaporation.

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Sell or Process Further Abica Coffee Company produces Columbian coffee in batches of 5,800 pounds. The standard quantity of materials required in the process is 5,800 pounds, which cost $5.00 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 $10.00 per pound. The processing into Decaf Columbian requires additional processing costs of $10,750 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 Abica Coffee Company Proposal to Process Columbian Coffee Further Differential Analysis Re Differential revenue from further processing per batch: 55,100 Revenue from sale of Decaf Columblan Revenue from sale of Columbian coffee 48.720V Differential revenue 6,380 Differential cost per batch: Additional cost of producing Decaf Columbian 29,000 X Differential loss from further Decaf Columbian per batch zz.szo 22,620 X Feedback Check My Work a. Follow Exhibit 10 in the text. For both products, subtract the costs from the revenues. Determine the differential effect on the revenues, costs, and income (loss). b. Should Abica Coffee sell Columbian coffee or process further and sell Decaf Columbian? No, sell Columblan 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. per pound Feedback Check My Work b. Consider which alternative has the most desirable effect on income