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 $ per ton, and ingot can be sold without further processing for $ per ton. Ingot is produced in batches of tons by smelting tons of bauxite, which costs $ per ton of bauxite. Rolled aluminum will require additional processing costs of $ per ton of ingot, and tons of ingot will produce ton of rolled aluminum due to trim losses

Required:

Question Content Area

Prepare a differential analysis as of February to determine whether to sell aluminum ingot Alternative or process further into rolled aluminum Alternative

Differential Analysis

Sell Ingot Alt or Process Further into Rolled Aluminum Alt

February

Line Item Description Sell Ingot

Alternative Process Further

into Rolled Aluminum

Alternative Differential Effects

Alternative

Revenues, per batch $Revenues, per batch

$Revenues, per batch

$Revenues, per batch

Costs, per batch Costs, per batch

Costs, per batch

Costs, per batch

Profit loss per batch $Profit loss per batch

$Profit loss per batch

$Profit loss per batch