Differential analysis for further processing

The management of International Aluminum $Co.$ is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for

$$2,200$ per ton, and ingot can be sold without further processing for $$1,100$ per ton. Ingot is produced in batches of $86$ tons by smelting $550$ tons of bauxite, which

costs $$102$ per ton of bauxite. Rolled aluminum will require additional processing costs of $$640$ per ton of ingot, and $1\mathrm{.}25$ tons of ingot will produce $1$ ton of rolled

aluminum.

Required:

Prepare a differential analysis as of February $5$ to determine whether to sell aluminum ingot $($Alternative $1)$ or process further into rolled aluminum $($Alternative

$.$ 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 $5$

International Aluminum Co$.$

: process aluminum ingot further, rather than sell aluminum ingot because profits would be