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SELL AS IS OR PROCESS FURTHER INCREMENTAL ANALYSIS. Gypsum 8. ders makes four compounds for dogs off of one raw material, Just Gyp-tick powder, powder,

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SELL "AS IS" OR PROCESS FURTHER INCREMENTAL ANALYSIS. Gypsum 8. ders makes four compounds for dogs off of one raw material, Just Gyp-tick powder, powder, itch powder, and talcum powder. The company makes 200,000 pounds of flea ust Gyp per year. It has recently been approached by an outside customer who would ke to buy the talcum powder before it has been fully processed. The company could also l the other powders at an earlier stage of production. The volumes and prices t various products ent products) vs. if processed further are included in the table below. If processed further, the company needs to add one half-pound of filler for every pound of product at a cost of $0.30 per pound. It also needs to package the product, which costs $0.20 in materials per quarter pound of Just Gyp material and $O.10 in labor per unit of finished product (one quarter-pound of the product with its filler). Hint: We add the filler so there is more final product in total pounds. One pound of Just Gyp makes 1.5 pounds of final product. if sold at the split-off point (when we go from raw material to four differ- Price per Pound if Price per Pound at Split-OffSplit-Off Point Cost per Pound at Product Pounds Made Processed Further Point $1.50 $1.75 $1.00 $0.50 $3.50 $4.00 $2.25 $2.00 $2.00 Tick Powder Flea Powder Itch Powder Talcum Powder 100,000 50,000 40,000 10,000 $2.50 $1.50 $1.00 REQUIRED: a. Perform an incremental analysis of this opportunity for Gypsum Powders. Do the analysis in total dollars for the year under each alternative. b. Should it make or continue to buy these products? Why

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