Sell or Process Further 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 $6.40 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 $12,250 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 Process Columbian Coffee Further Differential Analysis Report Differential revenue from further processing per batch: Revenue from sale of Decaf Columbian $Revenue from sale of Decaf Columbian Revenue from sale of Columbian coffee Revenue from sale of Columbian coffee Differential revenue $Differential revenue

Differential cost per batch: Additional cost of producing Decaf Columbian Additional cost of producing Decaf Columbian Differential income from further processing Decaf Columbian per batch $Differential income from further processing Decaf Columbian per batch