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 $$70,500,$ and the result is $6,200$ gallons of anderine and $8,500$ gallons of dofinol. Betram Chemicals can sell the anderine at split$-$off for $$13\mathrm{.}00$ per gallon and the dofinol for $$5\mathrm{.}70$ per gallon. Alternatively, the anderine can be processed further at a cost of $$8\mathrm{.}60$ per gallon $($of anderine$)$ into cermine. It takes $4$ gallons of anderine for every gallon of cermine. A gallon of cermine sells for $$62.$

Required:

Which alternative is more cost effective and by how much?

NOTE: Do NOT round interim calculations and, if required, round your answer to the nearest dollar.

Process it further $$ by $

$2.$ What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every $560$ gallons of anderine that undergo further processing require $20$ more purchase orders at $$10$ each and $16$ more quality inspection hours at $$25$ each. Which alternative would be better and by how much?

NOTE: Round interim calculations and your final answer to the nearest cent.

Sell at split$-$off $$ by $

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