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Sell at Split$-$Off or Process Further Decision, Alternatives, Relevant Costs

Betram Chemicals Company processes a number of chemical compounds used in producing industrial cleaning products. One compound is decomposed into two chemicals: anderine and dofinol. The cost of processing one batch of compound is $$76,000,$ and the result is $5,500$ gallons of anderine and $8,200$ gallons of dofinol. Betram Chemicals can sell the anderine at split$-$off for $$12\mathrm{.}00$ per gallon and the dofinol for $$5\mathrm{.}80$ per gallon. Alternatively, the anderine can be processed further at a cost of $$7\mathrm{.}80$ per gallon $($of anderine$)$ into cermine. It takes $4$ gallons of anderine for every gallon of cermine. A gallon of cermine sells for $$64.$

Required:

$1.$ Which alternative is more cost effective and by how much?

NOTE: Do NOT round interim calculations and, if required, round your answer to the nearest dollar.

Process it further

by $fill in the blank $2$

$2.$ What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every $600$ gallons of anderine that undergo further processing require $23$ more purchase orders at $$11$ each and $17$ more quality inspection hours at $$27$ each. Which alternative would be better and by how much?

NOTE: Round interim calculations and your final answer to the nearest cent.

Sell at split$-$off

by $fill in the blank $4$