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 $$2,300$ per ton, and ingot can be sold without further processing for $$1,150$ per ton. Ingot is produced in batches of $88$ tons by smelting $540$ tons of bauxite, which costs $$102$ per ton of bauxite. Rolled aluminum will require additional processing costs of $$600$ 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 $2).$ 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 $5q,$ Line Item Description $($Alternative $1)$ into Rolled Aluminu

Differential Effects

Revenues, per batch

Costs, per batch $$

$($Alternative $2)$

$($Alternative $2)$

Profit $($loss$),$ per batch $$

$$

$$

$$

$2.$ International Aluminum Co$.q,$ process aluminum ingot further, rather than sell aluminum ingot because profits would be