Sell at Split-Off or Process Further Decision, Alternatives, Relevant Costs Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health club fitness equipment. One compound is decomposed into two chemicals: flexalene and soreaphine. The cost of processing one batch of compound is $70,000, and the result is 6,200 gallons of flexalene and 7,600 gallons of soreaphine. Vihaan Chemicals can sell the flexalene at split-off for $13.00 per gallon and the soreaphine for $5.55 per gallon. Alternatively, the flexalene can be processer further at a cost of $7.10 per gallon (of flexalene) into lactine. It takes 4 gallons of flexalene for every gallon of lactine. A gallon of lactine sells for $62. Required: 1. 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. Sell at split-off by 6,477 2. What if the production of flexalene into lactine required additional purchasing and quality inspection activity? Every 480 gallons of flexalene that undergo further processing require 22 more purchase orders at $8 each and 12 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 17,527