=+PR 25-3A Differential analysis report for sales promotion proposal obj. 1

✔ 1. Differential income, tennis shoe, $225,000 The management of Allegheny Valley Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $1,600 per ton, and ingot can be sold without further processing for $950 per ton. Ingot is produced in batches of 66 tons by smelting 400 tons of bauxite, which costs $450 per ton.

Rolled aluminum will require additional processing costs of $425 per ton of ingot, and 1.2 tons of ingot will produce 1 ton of rolled aluminum (due to trim losses).

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