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Differential Analysis for Further Processing The management of International Aluminum C0. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can
Differential Analysis for Further Processing The management of International Aluminum C0. 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 5m biting 550 tons of bouxite, which costs $110 per ton of bauxite. Rolled aluminum will require additional processing costs of $650 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 Febrvary 5 to determine whether to sell aluminum ingot (Alternative 1) or process further into rolled aluminum (Aiternative 2 ), If required, do not round interim calculations. If required, use a minus sign to indicate a loss. Differential Analysis Sell Inget (Alt. 1) or Process Further into Rolled Aluminum (Alt, 2) February 5 2. International Aluminum Co process aluminum ingot further, rather than sell aluminum ingot because profits would be
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