Exercise 15-24 (similar to) Nunavut Mining Company (NMC) mines coul puts it through a one step crushing process, and loads the bulk raw coal onto river barges for shipment to customers. NMC'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 Szing and deaning plant is ruled out as being financially infeasible Instead Sara Donahue, a mining engineer is asked to explore outside contracting arrangements for the cleaning and sizing process Donahue puts together the following summary (Click the icon to view the summary) (Click the icon to view the additional information) Required Requirement 1. Prepare an analysis to show whether it is more profitable for NMC to continue selling raw bulk coal or to process it further through sizing and cleaning (ignore coalfines in your analysis ) Begin by calculating the incremental sales revenue and then incremental costs and the 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 minussion for losses) Incremental sales revenues Sales revenue after further processing Sales revenue from bulk raw coal Incremental sales revente 319300000 pal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipme er processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at highe eing financially infeasible. Instead, Sara Donahue, a mining engineer, is asked to explore outside contracti e following summary: X Summary Selling price of raw coal Cost of producing raw coal Selling price of sized and cleaned coal Annual raw coal output Percentage of material weight loss in sizing/cleaning coal $ 28 per tonne $ 19 per tonne $ 34 per tonne 10,300,000 tonnes 10 % Direct labour Supervisory personnel Heavy equipment rental, operating, maintenance costs Contract sizing and cleaning Outbound rail freight Incremental Costs of Sizing and Cleaning Processes $ 820,000 per year $ 220,000 per year $ 26,000 per month S 3.40 per tonne of raw coal $ 280 per 60-tonne rail car Print Done and then click Check Answer Donahue also learns that 75% of the material loss that occurs in the cleaning and sizing process can be salvaged as coal fines, which can be sold to steel manufacturers for their furnaces. The sale of coal fines is erratic and NMC may need to stockpile it in a protected area for up to one year. The selling price of coal fine ranges from $15 to $24 per tonne and costs of preparing coal fines for sale range from $2 to $6 per tonne