Question
The management of Dorsch Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $4,220 per
The management of Dorsch Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $4,220 per ton, and ingot can be sold without further processing for $2,363.2 per ton. Ingot is produced in batches of 100 tons by smelting 250 tons of bauxite, which costs $590.8 per ton. Rolled aluminum will require additional processing costs of $886.2 per ton of ingot, and 1.2 tons of ingot will produce 1 ton of rolled aluminum (due to trim losses).
Prepare a report presenting a differential analysis associated with the further processing of aluminum ingot to produce rolled aluminum.
I have the report finished except for a couple numbers.
What is the revenus from the sale of rolled Aluminum and how do I calculate this number?
The revenue from the sale of aluminum ingot is $235320.
What is the differential revenue?
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