Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 $77,000, and the result is 6,000 gallons of anderine and 8,400 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $6.40 per gallon. Alternatively, the anderine can be processed further at cost of $8.40 per gallon (of anderine) into cermine. takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $56. Required: 1. Which alternative is more cost effective and by how much? NOTE: Do NOT round interim calculations and, required, round your answer to the nearest dollar. Process it further by $ 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 490 gallons f anderine that undergo further processing require 23 more purchase orders at $12 each and 13 more quality inspection hours at $28 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 $ X

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 $77,000, and the result is 6,000 gallons of anderine and 8,400 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $6.40 per gallon. Alternatively, the anderine can be processed further at cost of $8.40 per gallon (of anderine) into cermine. takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $56. Required: 1. Which alternative is more cost effective and by how much? NOTE: Do NOT round interim calculations and, required, round your answer to the nearest dollar. Process it further by $ 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 490 gallons f anderine that undergo further processing require 23 more purchase orders at $12 each and 13 more quality inspection hours at $28 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 $ X

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 13P: Venezuela Oil Inc. transports crude oil to its refinery where it is processed into main products...
See similar textbooks
icon
Related questions
Question

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

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 $77,000, and the result is 6,000 gallons of anderine and 8,400 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $6.40 per gallon. Alternatively, the anderine can be processed further at a cost of $8.40 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $56. 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 $ X 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 490 gallons of anderine that undergo further processing require 23 more purchase orders at $12 each and 13 more quality inspection hours at $28 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 $ X
Transcribed Image Text: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 $77,000, and the result is 6,000 gallons of anderine and 8,400 gallons of dofinol. Betram Chemicals can sell the anderine at split-off for $10.00 per gallon and the dofinol for $6.40 per gallon. Alternatively, the anderine can be processed further at a cost of $8.40 per gallon (of anderine) into cermine. It takes 4 gallons of anderine for every gallon of cermine. A gallon of cermine sells for $56. 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 $ X 2. What if the production of anderine into cermine required additional purchasing and quality inspection activity? Every 490 gallons of anderine that undergo further processing require 23 more purchase orders at $12 each and 13 more quality inspection hours at $28 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 $ X
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Valuing Decision
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS