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Differential Analysis for further Processing The management of Interational Aluminum Co. is considering whether to process aluminum Ingot further into rolled aluminum. Rolled aluminum can
Differential Analysis for further Processing The management of Interational Aluminum Co. is considering whether to process aluminum Ingot further into rolled aluminum. Rolled aluminum can be sold for $2,200 per ton, and ingat can be sold without further processing for $1,100 per ton. Ingat is produced in batches of 99 tons by smelting 510 tons of bauxite, which costs $100 per ton of bauxite. Rolled aluminum will require additional processing costs of S620 per tan af ingot, and 1.25 tons of ingot will praduce 1 tan af rolled aluminum Required: 1. Prepare a differential analysis as of February 5 ta determine whether to sell aluminum ingat (Alternative 1) or process further into rolled aluminum (Alternative 2). If required, do not round interim calculations. If required, use a minus sign to indicate a loss Differential Analysis Sell Ingot (Alt. 1) or Process Further into Rolled Aluminum (Alt. 2) February 5 Process Differential Sell Ingot Further into Effects (Alternative 1) Rolled Aluminum (Alternative 2) (Alternative 2) + Revenues, per batch Costs, per batch Profit (loss), per batch 2. International Aluminum Co. process alurninum ingot further, rather than sell aluminum ingot because profits would be Check My Work 3 more Check My Work uses remaining. Previous Next >
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