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 80 tons by smelting s500 tons of bauxite, which costs s105 per ton of bauxite. Rolled aluminum will require ad processing costs of $620 per ton of ingot, and 1.25 tons of ingot will produce 1 ton of rolled aluminum (due to trim al losses) 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) Follow Example Exercise 25-5 For both products, subtract the costs from the revenues per ton Determine the differential effect on income of the revenues, costs, and income (loss)

Mel's meals 2 go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. mel's kitchen and adjoining meeting room operate at 70 percent of capacity. mel's purchases the cookies for $0.60 each but is considering making them instead. mel's can bake each cookie for $0.20 for materials, $0.15 for direct labor, and $0.45 for overhead without increasing its capacity. the $0.45 for overhead includes an allocation of $0.30 per cookie for fixed overhead. however, total fixed overhead for the company would not increase if mel's makes the cookies. mel himself has come to you for advice. "it would cost me $0.80 to make the cookies, but only $0.60 to buy. should i continue buying them? " materials and labor are variable costs, but variable overhead would be only $0.15 per cookie. two cookies are put into every lunch.how would you advise mel? prepare a schedule to show the differential cost.