Question: The management of Dorsch Aluminum Co is considering whether to

The management of Dorsch Aluminum Co. is considering whether to 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).
1. Prepare a report as of February 3, 2012, presenting a differential analysis associated with the further processing of aluminum ingot to produce rolled aluminum.
2. Briefly report your recommendations.

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  • CreatedFebruary 04, 2014
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