The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.08 per pound, and raw sugar can be sold without further processing for $1.16 per pound. Raw sugar is produced in batches of 44,400 pounds by processing 111,000 pounds of sugar cane, which costs $0.29 per pound of cane. Refined sugar will require additional processing costs of $0.44 per pound of raw sugar, and 1.20 pounds of raw sugar will produce 1 pound of refined sugar.

Required:

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1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2). If required, do not round interim calculations. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24

	Sell Raw Sugar (Alternative 1)	Process Further into Refined Sugar (Alternative 2)	Differential Effects (Alternative 2)
Revenues, per batch	$fill in the blank	$fill in the blank	$fill in the blank
Costs, per batc	fill in the blank	fill in the blank	fill in the blank
Profit (loss), per batch	$fill in the blank	$fill in the blank	$fill in the blank

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2. Dominican Sugar Company

shouldshould not

process raw sugar further to produce refined sugar, because profits would be

increasedreduced

.