evaluating the possiblity of further processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at higher prices. The option of building a new sizing and cleaning plant is ruled out as being financially infeasible. Instead, Amy Kimbell, a mining engineer, is asked to explore outside-contracting arrangements for the cleaning and sizing process. Kimbell puts logether the following summary: San Diego Mining Company (SMC) mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. SMC s manager and cleaning plant is ruled out as being financi Click the icon to view the summary.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Prepare an analysis to show whether it is more profitable for SMC to continue selling raw bulk coal or to process it further through sizing and cleaning. (Ignore coal fines in your analysis.) Begin by calculating the incremental sales revenue, then incremental costs and finally incremental gain or loss. (Do not round until the final answer for each cost calculation, then round to the nearest dollar. Use parentheses or a minus sign for losses.) San Diego Mining Company (SMC) mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. SMC's management is currently evaluating the possibility of further processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at higher prices. The option of building a new sizing and cleaning plant is ruled out as being financially infeasible. Instead, Amy Kimbell, a mining engineer, is asked to explore outside-contracting arrangements for the cleaning and sizing process. Kimbell puts together the following summary: (Click the icon to view the summary.) (Click the icon to view additional information.) Read the Incremental costs Incremental gain(loss) The analysis indicates that it would be more profitable to Requirement 2. How would your analysis be affected if the cost of producing raw coal could be held down to $16 per ton? The cost of producing the raw coal is to the decision to process further or not. This affect the analysis determined in requirement 1. Requirement 3. Now consider the potential value of the coal fines and prepare an addendum that shows how their value affects the results of your analysis prepared in hquirement 1. Begin by calculating the incremental income at both the minimum and maximum income levels. Analysis indicates that relative to selling bulk raw coal, the effect of further processing and selling coal fines is SMC would benefit from further processing and selling the coal fines evaluating the possiblity of further processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at higher prices. The option of building a new sizing and cleaning plant is ruled out as being financially infeasible. Instead, Amy Kimbell, a mining engineer, is asked to explore outside-contracting arrangements for the cleaning and sizing process. Kimbell puts logether the following summary: San Diego Mining Company (SMC) mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. SMC s manager and cleaning plant is ruled out as being financi Click the icon to view the summary.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Prepare an analysis to show whether it is more profitable for SMC to continue selling raw bulk coal or to process it further through sizing and cleaning. (Ignore coal fines in your analysis.) Begin by calculating the incremental sales revenue, then incremental costs and finally incremental gain or loss. (Do not round until the final answer for each cost calculation, then round to the nearest dollar. Use parentheses or a minus sign for losses.) San Diego Mining Company (SMC) mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. SMC's management is currently evaluating the possibility of further processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at higher prices. The option of building a new sizing and cleaning plant is ruled out as being financially infeasible. Instead, Amy Kimbell, a mining engineer, is asked to explore outside-contracting arrangements for the cleaning and sizing process. Kimbell puts together the following summary: (Click the icon to view the summary.) (Click the icon to view additional information.) Read the Incremental costs Incremental gain(loss) The analysis indicates that it would be more profitable to Requirement 2. How would your analysis be affected if the cost of producing raw coal could be held down to $16 per ton? The cost of producing the raw coal is to the decision to process further or not. This affect the analysis determined in requirement 1. Requirement 3. Now consider the potential value of the coal fines and prepare an addendum that shows how their value affects the results of your analysis prepared in hquirement 1. Begin by calculating the incremental income at both the minimum and maximum income levels. Analysis indicates that relative to selling bulk raw coal, the effect of further processing and selling coal fines is SMC would benefit from further processing and selling the coal fines
