Beruflich Dokumente
Kultur Dokumente
$95,000
86,400
$
$ (1,900)
*5% 8,000
b.
c.
The price of Decaf Columbian would need to increase to $12.75 per pound in
order for the differential analysis to yield neither an advantage or a
disadvantage (indifference). This is determined as follows:
$1,900
Net Disadvantage of Further Processing
= 7,600 lbs. = $0.25 per lb.
Volume of Decaf Columbian
The price of Decaf Columbian would need to be $0.25 higher, or $12.75, to yield
no net differential income or loss. This is verified by the following differential
analysis:
Differential revenue from further processing per batch:
$96,900
86,400
$ 0
$195,000 14 yrs.
2.
3.
*The $866,000 income from operations could also be determined by adding the
$131,000 income from operating the warehouse as derived in part (1) to the
$735,000 of investment income forgone by electing to operate the warehouse.
$42,750
29,700