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eBook Print liem Sell at Split - Off or Process Further Decision, Alternatives, Relevant Costs Betram Chemicals Company processes a number of chemical compounds used

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Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs
Betram Chemicals Company processes a number of chemical compounds used in producing industrial cleaning products. One compound is decomposed into two chemicals: anderine and dofinol. The cost of processing one batch of compound is $75,500, and the result is 6,000 gallons of anderine and 7,700 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $7.20 per gallon. Alternatively, the anderine can be processed further at a cost of $8.90 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $57.
Required:
Which alternative is more costieffective and by how much?
NOTE: DO NOT round interim calc4 Alpha-numeric input field ound your answer to the nearest dollar.
Sell at split-off by $
2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 480 gallons of anderine that undergo further processing require 18 more purchase orders at $9 each and 15 more quality inspection hours at $26 each. Which alternative would be better and by how much?
NOTE: Round interim calculations and your final answer to the nearest cent.
by $
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