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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
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 86 tons by smeiting 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 Fobruary 5 to determine whether to sell aluminum ingot (Aiternative 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 Ingot (Alt. 1) or Process Further into Rolled Aluminum (Alt. 2)
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