Differential analysis report for further processing
The management of Dorsch Aluminum Co. is considering whether 10 process aluminum ingot further into rolled aluminum. Rolled aluminum can be sold for $4,100 per ton, and ingot can be sold without further processing for $2,400 per ton. Ingot is produced in batches of 80 tons by smelting 400 tons of bauxite, which costs $500 per ton. Rolled aluminum will require additional processing costs of $750 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum (due to trim losses).
Instructions
Prepare a report presenting a differential analysis associated with the further processing of aluminum ingot to produce rolled aluminum.
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