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Starbuck Coffee Company produces Colombian coffee in batches of 8,000 pounds. The raw coffee beans cost $5.00 per pound. Roasted Colombian coffee can be sold
Starbuck Coffee Company produces Colombian coffee in batches of 8,000 pounds. The raw coffee beans cost $5.00 per pound. Roasted Colombian coffee can be sold without further processing for $10.80 per pound. Colombian coffee can also be processed further to yield Decaf Colombian, which can be sold for $12.50 per pound, but the additional processing costs $10,500 per batch and causes a loss of 5% of product 1) Prepare an incremental analysis report for the decision to sell or process further. 2) Should Starbuck Coffee sell Colombian coffee, or process further and sell Decaf? 3) Determine the price of Decaf Colombian that would cause neither an advantage or disadvantage between the two products. This is known as the point of indifference
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