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 Precision Pi $27/ton Delta Pi Selling price $13/ton $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? 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?
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 Precision Pi $27/ton Delta Pi Selling price $13/ton $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? 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
hello, help please with B and C
![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:
Pi
Precision Pi
Super Delta
$18/ton
Delta
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.
c. 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44040561-bc3e-4c0f-83c7-6bff2be49517%2Fd7f24e8d-a3b8-40ba-b800-0fd38304df09%2Fqboht1x_processed.jpeg&w=3840&q=75)
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:
Pi
Precision Pi
Super Delta
$18/ton
Delta
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.
c. 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.
![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?
Complete this question by entering your answers in the tabs below.
es
Required A1
Required A2
Required B
Required C
Identify any costs in the problem that are not relevant to this decision.
Irrelevant cost
< Required A2
Required C >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44040561-bc3e-4c0f-83c7-6bff2be49517%2Fd7f24e8d-a3b8-40ba-b800-0fd38304df09%2F1i2f15_processed.jpeg&w=3840&q=75)
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?
Complete this question by entering your answers in the tabs below.
es
Required A1
Required A2
Required B
Required C
Identify any costs in the problem that are not relevant to this decision.
Irrelevant cost
< Required A2
Required C >
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
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.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education