Problems1. The management of Dominican Sugar Company isconsidering whether to process further raw sugar intorefined sugar. Refined sugar can be sold for $2.20 perpound, and raw sugar can be sold without furtherprocessing for $1.40 per pound. Raw sugar is produced inbatches of 42,000 pounds by processing 100,000 pounds ofsugar cane, which costs $0.35 per pound of cane. Refinedsugar will require additional processing costs of $0.50 perpound of raw sugar, and 1.25 pounds of raw sugar willproduce 1 pound of refined sugar.Problem 1 Instructionsa. Prepare a differential analysis as of March 24 todetermine whether to sell raw sugar (Alternative 1) orprocess further into refined sugar (Alternative 2).b. Briefly report your recommendations.

Answered: sugar can be sold for $2.20 can be sold…

sugar can be sold for $2.20 can be sold without further ber pound. Raw sugar is prod unds by processing 100,000 p =ts $0.35 per pound of cane. F itional processing costs of $C

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4PA

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The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar. Required: 1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2).
The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.24 per pound, and raw sugar can be sold without further processing for $1.25 per pound. Raw sugar is produced in batches of 34,800 pounds by processing 87,000 pounds of sugar cane, which costs $0.31 per pound of cane. Refined sugar will require additional processing costs of $0.47 per pound of raw sugar, and 1.20 pounds of raw sugar will produce 1 pound of refined sugar. Required: Question Content Area 1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2). If required, do not round interim calculations. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisSell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2)March 24 Sell RawSugar(Alternative 1)…
Differential Analysis for Further Processing The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar. Required: 1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2). Differential Analysis Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24 Process Sell Raw Further into Differential Sugar (Alternative 1) Refined Effects Sugar (Alternative 2) (Alternative 2) Revenues, per batch Costs, per batch…
Differential Analysis for Further Processing The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar. Required: Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2). Differential Analysis Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24 Sell RawSugar(Alternative 1) ProcessFurther intoRefinedSugar(Alternative 2) DifferentialEffects (Alternative 2) Revenues, per batch…
he management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar. Required: 1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2). Differential Analysis Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24 Sell RawSugar(Alternative 1) ProcessFurther intoRefinedSugar(Alternative 2) DifferentialEffects(Alternative 2) Revenues, per batch $ $ $ Costs, per batch Profit (loss), per…
Cobb Co. can further process Product X to produce Product Y. Product X is currently selling for $30 per pound and costs $28 per pound to produce. Product Y would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the net differential income from producing Product Y? (a)$6 per pound (b)a$8 per pound (c)$2 per pound (d)$30 per pound A
Parker Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $35 per pound and would require an additional cost of $8.75 per pound to produce. What is the net differential income of producing Product D? $7 per pound $8.75 per pound $15 per pound $5.25 per pound
A beverage company is evaluating the production of a beverage drink that requires 600 kg of sugar. The company has 275 kg of sugar in stock that was purchased in the past for RO 2 per kg. The company no longer has any use for sugar. The old stock of sugar could be sold for RO 1.5 per kg. The current purchase price for dry nuts is RO 2.5 per kg. What is the total relevant cost of sugar for the production of beverage drink? a. RO 687.5 b. RO 1,225 c. RO 1,775 d. RO 1,362.5
7)Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20 per pound and costs $15.75 per pound to produce. Product D would sell for $38 per pound and would require an additional cost of $8.55 per pound to produce. What is the differential revenue of producing Product D? a. $18.00 per pound b. $6.25 per pound c. $22.25 per pound d. $6.75 per pound 8)Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated. Should the special order be accepted? a. yes b. There would be no difference in accepting or rejecting the…
11. Sell or process further. In producing Ergon, a by-product, Bygon, is also made and is sold for $20 per ton. The company is considering combining additional chemicals with Bygon to produce low-grade fertilizer, to be called Exton, and sold to wholesalers at $12 per 100 pounds. The chemi cals would be added to Bygon at the rate of 40 pounds per 100 pounds of by-product. Additional 2500000 costs would be: Chemicals. Direct labor Variable factory overhead.. $7.00 per 100 pounds of input 3.00 per 100 pounds of output 1.50 per 100 pounds of output 100 = 25000 While present facilities are adequate to produce Exton, $40,000 in additional annual promo- tion and advertising costs would be incurred. The current volume of Bygon is 2,500,000 pounds, or (12-11-5)=) 0.5*25000 12500 1,250 tons. Required: Recommendation to sell Bygon or process further to produce Exton. (.
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $20 per pound and costs $15 per pound to produce. Product C would sell for $40 per pound and would require an additional cost of $10 per pound to produce. The differential revenue of producing and selling Product C is a. $30 per pound b. $40 per pound c. $25 per pound d. $20 per pound
Bonita Company manufactures a product with a unit variable cost of $43 and a unit sales price of $75. Fixed manufacturing costs were $79500 when 7950 units were produced and sold, equating to $10 per unit. The company has a one-time opportunity to sell an additional 1000 units at $54 each in an international market, which would notaffect its present sales. The company has sufficient capacity to produce the additional units. How much is the relevant income effect of accepting the special order? $43000 $1000 $11000 $7950