Question
ADP Mining Company mines an iron ore called Alpha. During the month of August, 175,000 tons of Alpha were mined and processed at a cost
ADP Mining Company mines an iron ore called Alpha. During the month of August, 175,000 tons of Alpha were mined and processed at a cost of $525,000. As the Alpha ore is mined, it is processed into Delta and Pi, where 60% of the Alpha output becomes Delta and 40% becomes Pi. Each product can be sold as is or processed into the refined products Super Delta and Precision Pi. Selling prices for these products are:
Selling price
| Delta $12/ton | Super Dealta $18/ton | Pi $25/ton | Precision Pi $35/ton | ||
Processing costs to refine Delta into Super Delta are $840,000; processing costs to refine Pi into Precision Pi are $560,000.
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