Betram Chemicals Company processes a number of chemical compounds used in producing industrial cleaning products. One compound is decomposed into two chemicals: anderine and dofinol. The cost of processing one batch of compound is $76,500, and the result is 5,600 gallons of anderine and 8,500 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $11.00 per gallon and the dofinol for $5.55 per gallon. Alternatively, the anderine can be processed further at a cost of $7.20 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $60.

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. Sell at split-off by $ 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 490 gallons of anderine that undergo further processing require 22 more purchase orders at $10 each and 18 more quality inspection hours at $24 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 $