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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 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?

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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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.
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 >
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 >
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