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Sell or Process Further Zing Coffee Company produces Columbian coffee in batches of 5,200 pounds. The standard quantity of materials required in the process

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Sell or Process Further Zing Coffee Company produces Columbian coffee in batches of 5,200 pounds. The standard quantity of materials required in the process is 5,200 pounds, which cost $5.00 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 $11.00 per pound. The processing into Decaf Columbian requires additional processing costs of $11,850 per batch. The additional processing will also cause a 4% loss of product due to evaporation. a. Prepare a differential analysis report for the decision to sell or process further. Zing Coffee Company Proposal to Process Columbian Coffee Further Differential Analysis Report Differential revenue from further processing per batch: Revenue from sale of Decaf Columbian Revenue from sale of Columbian coffee Differential revenue Differential cost per batch: 54,912 33,280 21,632 Additional cost of producing Decaf Columbian Differential income from further processing Decaf Columbian per batch Feedback -11,850 9,782 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 Zing Coffee sell Columbian coffee or process further and sell Decaf Columbian? Yes, 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 the nearest cent. Additional cost of producing Decaf Columbian -11,850 Differential income from further processing Decaf Columbian per batch 9,782 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 Zing Coffee sell Columbian coffee or process further and sell Decaf Columbian? Yes, 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 the nearest cent. 12.96 X per pound Feedback Check My Work b. Consider which alternative has the most desirable effect on income. c. Divide the net advantage of further processing by the volume of decaf Columbian.

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