Check My Work eBook Cornerstone Exercise 17.4 (Algorithmic) Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs une compared your enemies 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 $75,000, and the result is 6,300 gallons of anderine and 8,000 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $9.00 per gallon and the dofinol for $5.60 per gallon. Alternatively, the anderine can be processed further at a cost of $7.90 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $57. Required: 1. Which alternative is more cost effective and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest cent. Process it further by $ X chas enders at se ench and 16 mere unity inspection hours at sa esh, which alternative would be bet 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 550 gallons of anderine that undergo further processing require 18 more purchase orders at $8 each and 16 more quality inspection hours at $27 each. Which alternative would be better and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest cent. Sell at split-off by $ Hide Feedback Partially Correct Check My Work Feedback 1. Set up the analysis with the relevant costs and revenues organized under a column heading for each alternative. What is the difference between the two alternatives? 2. Set up the analysis with the relevant costs and revenues organized under a column heading for each alternative. TAT 1 Check My Work eBook Cornerstone Exercise 17.4 (Algorithmic) Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs une compared your enemies 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 $75,000, and the result is 6,300 gallons of anderine and 8,000 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $9.00 per gallon and the dofinol for $5.60 per gallon. Alternatively, the anderine can be processed further at a cost of $7.90 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $57. Required: 1. Which alternative is more cost effective and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest cent. Process it further by $ X chas enders at se ench and 16 mere unity inspection hours at sa esh, which alternative would be bet 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 550 gallons of anderine that undergo further processing require 18 more purchase orders at $8 each and 16 more quality inspection hours at $27 each. Which alternative would be better and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest cent. Sell at split-off by $ Hide Feedback Partially Correct Check My Work Feedback 1. Set up the analysis with the relevant costs and revenues organized under a column heading for each alternative. What is the difference between the two alternatives? 2. Set up the analysis with the relevant costs and revenues organized under a column heading for each alternative. TAT 1
