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Differential Analysis for Further Processing The management of International Aluminum Co. is considering whether...

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Accounting

Differential Analysis for Further Processing
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 90 tons by smelting 540 tons of bauxite, which costs $101 per ton of bauxite. Rolled aluminum will require additional processing costs of $610 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum.
Required:
Prepare a differential analysis as of February 5 to determine whether to sell aluminum ingot (Alternative 1) or process further into rolled aluminum (Alternative 2). If required, do not round interim calculations. If required, use a minus sign to indicate a loss.
Differential Analysis
Sell Ingot (Alt.1) or Process Further into Rolled Aluminum (Alt.2)
February 5
\table[[,\table[[Sell Ingot],[(Alternative 1)]],\table[[Process],[Further into],[Rolled],[Aluminum (Alternative 2)]],\table[[Differential],[Effects],[(Alternative 2)]]],[Revenues, per batch,$,$,$
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