Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Zing Coffee Company produces Columbian coffee in batches of 5,600 pounds. The standard quantity of materials required in the process is 5,600 pounds, which cost

image text in transcribed
image text in transcribed
image text in transcribed
Zing Coffee Company produces Columbian coffee in batches of 5,600 pounds. The standard quantity of materials required in the process is 5,600 pounds, which cost $5 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yleld Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $11,578 per batch. The additional processing also causes a 5% loss of product due to evaporation. a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Country Jeans Co. has an annual plant capacity of 65,100 units, and current production is 46,700 units. Monthly fixed costs are $39,600, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Miller Company for 16,900 units of the product at $28 each. Miller Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Country Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2 ) the Miller order. If an amount is zero, enter zero " 0 ". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Inman Construction Company is considering selling excess machinery with a book value of $282,600 (original cost of $401,700 less accumulated depreciation of $119,100 ) for $275,900, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $283,000 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,000. a. Prepare a differential analysis, dated May 25 to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions