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v2.cengagenow.com Cengage CengageNOWv2 Online teaching and learning resource from Cenga. Differential Analysis For Further Processing The M... Chegg.com+ Chapter 24 HW eBook Calculator Print Item 1. EX.24-10.ALGO Differential Analysis for Further Processing 2. EX.24-14.ALGO The management of International Aluminum Co. is considering whether to process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $2,200 per ton, and ingot can be sold without further processing for $1,100 per ton. Ingot is produced in batches of 80 tons by smelting 500 tons of bauxite, which costs $105 per ton of bauxite. Rolled aluminum will require additional processing costs of $620 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum (due to trim losses). 3. EX 24-17.ALGO 4. EX 24-21.ALGO Required: 5. PR.24-04B 1. Prepare a differential analysis as of February 5 to determine whether to sell aluminum ingot (Alternative 1) or process further into rolled aluminum (Alternative 2). Use a minus sign to indicate subtracted amounts, negative amounts, or a loss. Differential Analysis Sell Ingot (Alt. 1) or Process Further into Rolled Aluminum (Alt. 2) Sell Ingot (Alternative 1) Process Further into Rolled Aluminum (Alternadive 2) Differential Effect on Income (Alternative 2) 00 88,000 -52,500 35,500 140,800v 92,180 X 48,620 x 52,800 1-39.680) x ? 13,120 X Revenues, per ton Costs, per ton Income (loss), per ton Feedback 2. International Aluminum Co. should process aluminum ingot further, rather than sell aluminum ingot because profits would be increased if ingot was processed further into rolled aluminum. Feedback Check My Work Previous Progress: 5/5 items Assignment Score: 95.56% All work saved Email Instructor Save and Exit Submit Assignment for Grading

Explanation / Answer

Sell ignot Process further Differential effect on income Revenues, per ton 88000 140800 52800 Costs, per ton -52500 -102100 -49600 Income(loss) per ton 35500 38700 3200 Costs, per ton for porcessing further = 52500+(80*620)= $102100

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