of Dominican Sugar Company is pound, and raw sugar can be sold without further p
ID: 2570031 • Letter: O
Question
of Dominican Sugar Company is pound, and raw sugar can be sold without further processing for $1.36 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of raw sugar will produce 1 pound of refined sugar 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). Refer to the Amount amount or an amount is zero, enter "o A colon (:) will automatically appear if required.Explanation / Answer
1)
**cost for refined sugar:cost -sugarcane+additional cost
= [100000*.33+[42000*.51]
= 33000+ 21420
= 54420
2)The raw sugar should not be processed further as it will result in loss of $5628 in to refined sugar .it should be sold as a raw sugar only .
sell raw sugar Processed further refined sugar Differential effect on income Revenue 57120 72912 15792 [72912-57120] cost per batch -33000 [100000*.33] -54420 -21420 [-54420-(-33000)] Income/(loss )per batch 24120 18492 -5628
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