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Sell or Process Further Zanda Drug Corporation buys three chemicals that are processed to produce two types of analgesics used as ingredients for popular over-the
Sell or Process Further Zanda Drug Corporation buys three chemicals that are processed to produce two types of analgesics used as ingredients for popular over-the counter drugs. The purchased chemicals are blended for 2 to 3 hours and then heated for 15 minutes. The results of the process are two separate analgesics, depri and pencol, which are sent to drying room until their mosture content izs reduced to 6 to 9%For every 1,300 pounds of chemicals used, 600 pounds of depryl and 600 pounds of pencol are produced. After drying, depryl and pencol are sold to companias that process tham into their final form. The salling prices are $12 per pound for depryl and $30 per pound for pancol. The coats to produco 500 pounds of aach analgesic are a follows: $9,500 6,735 9,900 Direct labor The analgesics are packaged in 20-pound bags and shipped. The cost of each bag is1.30. Shipping costs $0.10 per pound. Zanda could process depryl further by grinding it into a fine ponder and then molding the powder into tablets. The tablets can be sold directly to retail drug stores as a generic brand tf this route were taken, the revenue received per bottle of tablets would be $4.00, ith 10 bottles produced by every pound of depryl. The costs of grinding and tableting total $2.50 per pound of depryl. Bottles cost $0.40 eoch. Bottles are shipped in boxes that hold 25 bottles at a shipping cost of $1.60 per box. Required 1. Conceptual Connectioni Should Zanda sell depryl at split-off, or should depryl be processed and sold as tablets 2. If Zanda normally sells 265,000 pounds of depryl per year, what will be the difference in profits if depryl is processed further? Do not round intermediate calculations Check My Work Prewous Save and Ext Submit Assignment for Grading
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