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Differential Analysis for Further Processing The management of International Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum

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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 $2,100 per ton, and ingot can be sold without further processing for $1,050 per ton. Ingot is produced in batches of 80 tons by smelting 550 tons of bauxite, which costs $110 per ton of bauxite. Rolled aluminum will require additional processing costs of $600 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum. Required: 1. Prepare a differential analysis as of February 5 to determine whether to sell aluminum ingot (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 Sell Ingot (Alternative 1) Revenues, per batch Costs, per batch Profit (loss), per batch i 2. International Aluminum Co. would be Process Further into Rolled Aluminum (Alternative 2) DU Differential Effects (Alternative 2) process aluminum ingot further, rather than sell aluminum ingot because profits

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