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ADP Mining Company mines an iron ore called Alpha. During the month of August, 403,000 tons of Alpha were mined and processed at a cost of $744,000. As the Alpha ore is mined, it is processed into Delta and Pi, where 60% of the Alpha output becomes Delta and 40% becomes Pi. Each product can be sold as is or processed into the refined products Super Delta and Precision Pi. Selling prices for these products are as follows: Precision Pi $27/ton Pi Delta $13/ton Super Delta $18/ton Selling price $18/ton Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? hlom that are pot relevant to this decision. FAlpha?

ADP Mining Company mines an iron ore called Alpha. During the month of August, 403,000 tons of Alpha were mined and processed at a cost of $744,000. As the Alpha ore is mined, it is processed into Delta and Pi, where 60% of the Alpha output becomes Delta and 40% becomes Pi. Each product can be sold as is or processed into the refined products Super Delta and Precision Pi. Selling prices for these products are as follows: Precision Pi $27/ton Pi Delta $13/ton Super Delta $18/ton Selling price $18/ton Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? hlom that are pot relevant to this decision. FAlpha?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ADP Mining Company mines an iron ore called Alpha. During the month of August, 403,000 tons of Alpha were mined and processed at a cost of $744,000. As the Alpha ore is mined, it is processed into Delta and Pi, where 60% of the Alpha output becomes Delta and 40% becomes Pi. Each product can be sold as is or processed into the refined products Super Delta and Precision Pi. Selling prices for these products are as follows: Super Delta $18/ton Delta Pi Precision Pi Selling price $13/ton $18/ton $27/ton Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. ces Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? b. Identify any costs in the problem that are not relevant to this decision. What is the maximum profit that ADP Mining Company can expect to earn from the production of the 403,000 tons of Alpha? Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? (Loss amounts should be indicated with a minus sign.) Super Delta Incremental Profit (Loss) per unit
Transcribed Image Text:ADP Mining Company mines an iron ore called Alpha. During the month of August, 403,000 tons of Alpha were mined and processed at a cost of $744,000. As the Alpha ore is mined, it is processed into Delta and Pi, where 60% of the Alpha output becomes Delta and 40% becomes Pi. Each product can be sold as is or processed into the refined products Super Delta and Precision Pi. Selling prices for these products are as follows: Super Delta $18/ton Delta Pi Precision Pi Selling price $13/ton $18/ton $27/ton Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. ces Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? b. Identify any costs in the problem that are not relevant to this decision. What is the maximum profit that ADP Mining Company can expect to earn from the production of the 403,000 tons of Alpha? Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? (Loss amounts should be indicated with a minus sign.) Super Delta Incremental Profit (Loss) per unit
Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? b. Identify any costs in the problem that are not relevant to this decision. c. What is the maximum profit that ADP Mining Company can expect to earn from the production of the 403,000 tons of Alpha? ok at Complete this question by entering your answers in the tabs below. nces Required A1 Required A2 Required B Required C What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? (Loss amounts should be indicated with a minus sign.) Super Delta Incremental Profit (Loss) per unit Precision Pi Incremental Profit (Loss) per unit Requiret AT Required A2 > 40
Transcribed Image Text:Processing costs to refine Delta into Super Delta are $2,659,800; processing costs to refine Pi into Precision Pi are $967,200. Required: a. What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? Should Delta and Pi be sold as is or refined into Super Delta and Precision Pi? b. Identify any costs in the problem that are not relevant to this decision. c. What is the maximum profit that ADP Mining Company can expect to earn from the production of the 403,000 tons of Alpha? ok at Complete this question by entering your answers in the tabs below. nces Required A1 Required A2 Required B Required C What would be the incremental profit or loss per unit if Delta and Pi are refined into Super Delta and Precision Pi? (Loss amounts should be indicated with a minus sign.) Super Delta Incremental Profit (Loss) per unit Precision Pi Incremental Profit (Loss) per unit Requiret AT Required A2 > 40
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