A Company processes a number ofl compounds used in creating industrial cleaning products. One compound is decomposed into two chemicals: anderine and dofinol. The cost of processing one batch of compound is $71,500, and the result is 6,300 gallons of anderine and 7,500 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $7.40 per gallon. Alternatively, the anderine can be processed further at a cost of $7.30 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $65.

Required: 1. Which alternative is more cost effective and by how much? NOTE: Do NOT round interim calculations and, if required, round your answer to the nearest dollar.

--Process it further by: $---?

2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 520 gallons of anderine that undergo further processing require 19 more purchase orders at $12 each and 18 more quality inspection hours at $27 each. Which alternative would be better and by how much? NOTE: Round interim calculations and your final answer to the nearest cent.

---Sell at split off by: $---?