Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Question
Chapter 12, Problem 12.11E
To determine
(a)
Concept Introduction:
Differential Analysis Report: This report involves analyzing the different benefit and cost that would arise from an alternative solution to a particular problem. It is also known as incremental analysis.
To Prepare:
The differential analysis report for taking decisions to sell or process further.
To determine
(b)
Concept Introduction:
Differential Analysis Report: This report involves analyzing the different benefit and cost that would arise from an alternative solution to a particular problem. It is also known as incremental analysis.
To Find out:
Whether it is beneficial for company either to further processing or not.
To determine
(c)
Concept Introduction:
Differential Analysis Report: This report involves analyzing the different benefit and cost that would arise from an alternative solution to a particular problem. It is also known as incremental analysis.
To find out:
The net advantage or disadvantage after further processing and selling Decaf Coffee.
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Sell or Process Further
Abica 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 $10.00 per pound. The processing into Decaf Columbian requires additional processing costs of $10,950 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
Proposal to Process Columbian Coffee Further
Differential Analysis Report
Differential revenue from further processing per batch:
$
$
Differential cost per batch:
$
b. Should Abica Coffee sell Columbian coffee or process further and sell Decaf…
Sell or Process Further
Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 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
Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2)
October 6
SellRegularColumbian(Alternative 1)…
Sell or Process Further Rise N' Shine Coffee Company produces Columbian coffee in batches of 4,300 pounds. The
standard quantity of materials required in the process is 4, 300 pounds, which cost $6 per pound. Columbian coffee can
be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf
Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing
costs of $8,972 per batch. The additional processing also causes a 5% loss of product due to evaporation. Question
Content Area 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 b. 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 two decimal places.
0
Differential Analysis
Sell…
Chapter 12 Solutions
Survey of Accounting (Accounting I)
Ch. 12 - Mario Company is considering discontinuing a...Ch. 12 - Victor Company is considering disposing of...Ch. 12 - Prob. 3SEQCh. 12 - For which cost concept used in applying (he...Ch. 12 - Prob. 5SEQCh. 12 - Prob. 1CDQCh. 12 - Prob. 2CDQCh. 12 - A company could sell a building for $650,000 or...Ch. 12 - Prob. 4CDQCh. 12 - Prob. 5CDQ
Ch. 12 - A company fabricates a component at a cost of...Ch. 12 - Prob. 7CDQCh. 12 - Prob. 8CDQCh. 12 - Prob. 9CDQCh. 12 - Prob. 10CDQCh. 12 - Prob. 11CDQCh. 12 - Prob. 12CDQCh. 12 - Lease or sell decision Orwell Industries is...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Make-or-buy decision Watts Technologies Company...Ch. 12 - Make-or-buy decision Wisconsin Arts of Milwaukee...Ch. 12 - Machine replacement decision Creekside Products...Ch. 12 - Differential analysis report for machine...Ch. 12 - Sell or process further St. Paul Lumber Company...Ch. 12 - Prob. 12.11ECh. 12 - Decision on accepting additional business Madison...Ch. 12 - Accepting business at a special price Palomar...Ch. 12 - Prob. 12.14ECh. 12 - Total cost concept of product costing Willis...Ch. 12 - Product cost concept of product pricing Based on...Ch. 12 - Variable cost concept of product pricing Based on...Ch. 12 - Target costing Toyota Motor Corporation (TM) uses...Ch. 12 - Differential analysis report involving opportunity...Ch. 12 - Prob. 12.1.2PCh. 12 - Prob. 12.1.3PCh. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for further...Ch. 12 - Prob. 12.4.2PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.2PCh. 12 - Prob. 12.5.3PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.5PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.1MBACh. 12 - Prob. 12.2MBACh. 12 - Prob. 12.3.1MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.3.3MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.4.2MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.5.1MBACh. 12 - Prob. 12.5.2MBACh. 12 - Prob. 12.5.3MBACh. 12 - Product pricing Bev Frazier is a cost accountant...Ch. 12 - Prob. 12.2CCh. 12 - Prob. 12.3CCh. 12 - Cost-plus and target costing concepts The...Ch. 12 - Cost-plus and target costing concepts The...
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