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Zing Coffee Company produces Columbian coffee in batches of 5,300 pounds. The standard quantity of materials required in the process is 5,300 pounds, which cost
Zing Coffee Company produces Columbian coffee in batches of 5,300 pounds. The standard quantity of materials required in the process is 5,300 pounds, which cost $6.00 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 $12.00 per pound. The processing into Decaf Columbian requires additional processing costs of $10,150 per batch. The additional processing will also cause a 6% 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 59,784 Revenue from sale of Columbian coffee Differential revenue 11,750 Differential cost per batch: Additional cost of producing Decaf Columbiar 11,750 Differential income from further processing Decaf Columbian per batch 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. 9.17X per pound
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