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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.

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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 $74,000, and the result is 6,000 gallons of anderine and 8,000 gallons of dofinal. Betram Chemicals can sell the anderine at split-off for $11 per gallon and the dolinol for $6.75 per gallion. Alternatively, the anderine can be processed further at a cost of sa per gallon (of anderine) into cermine. It takes 3 gallons of anderine for every gallon of cermine. A gallon of cermine selles for $60. Required: 1. Which alternative is more cost effective and by how much? Process it further_by 2. What if the production of anderine into cermine required additional purchasing and quality impection activity? Every 500 gallons of anderine that undergo further processing require 20 more purchase orders at $10 each and 15 more quality inspection hours at 525 each. Which alternative would be better and by how much? Sell at split-aff by

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