Sell at Solit-of or Process Further Decsion, Alternatives, Relevant Costs Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health cub fitness eguoment. One compound is decomposed into twe chemicals: flealene and soreaohine. The cost of processing one batch of compound is $79,000, and the result is 6,300 gatons of fexalene and 7,500 galons of soreaphine. Vhaan Chemicals can seli the flexalete at spit off for $11.00 per gallon and the soreaphine for $5.70 per galon. Alternatively, the fexalene can be processed further ata cost of .00 per galon (of fealene) ints lactine. takes 2 galons of fealene for every galen of lactine. A gaton of lactine sets for $62. Required: 1. Which aternative is more cost efective and by how much? NOTE: De NOT reund interim calculations and, if required, round your answer to the nearest dollar. Precess it further 2. What if the production of fexalene inte lactine required additional purchasing and quality inspection activity Every 450 patons of flexalene that undergo further processing require 22 mere purchase orders at $9 each and 16 more quality inspection hours at $25 each. Which alternative would be better and by how much? NOTE Round interim calculations and your final answer to the nearest cent.
Sell at Solit-of or Process Further Decsion, Alternatives, Relevant Costs Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health cub fitness eguoment. One compound is decomposed into twe chemicals: flealene and soreaohine. The cost of processing one batch of compound is $79,000, and the result is 6,300 gatons of fexalene and 7,500 galons of soreaphine. Vhaan Chemicals can seli the flexalete at spit off for $11.00 per gallon and the soreaphine for $5.70 per galon. Alternatively, the fexalene can be processed further ata cost of .00 per galon (of fealene) ints lactine. takes 2 galons of fealene for every galen of lactine. A gaton of lactine sets for $62. Required: 1. Which aternative is more cost efective and by how much? NOTE: De NOT reund interim calculations and, if required, round your answer to the nearest dollar. Precess it further 2. What if the production of fexalene inte lactine required additional purchasing and quality inspection activity Every 450 patons of flexalene that undergo further processing require 22 mere purchase orders at $9 each and 16 more quality inspection hours at $25 each. Which alternative would be better and by how much? NOTE Round interim calculations and your final answer to the nearest cent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Sell at Split-Of or Process Further Decision, Alternatives, Relevant Costs
Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health cub fitness equipment. One compound is decomposed into two chemicals: flexalene and soreachine. The cost
of processing one batch of compound is $79,000, and the result is 6,300 galions of nexstene and 7,500 gallons of soreaphine. Vihaan Chemicals can sell the flexalene at split-off for $11.00 per gallon and the
soreaphine tor $5.70 per gallon. Albernatively, the flexalene can be processed further at a cost of sa.00 per gallon (af fexalene) inta lactine. It takes 2 galons of fexalene for every galon of lactine. A çaton of
lactine sels for $62.
Required:
1. Which alternative is more cost effective and by how much?
NOTE: Do NOT round interim calculations and, ir required, round your answer to the nearest dollar.
Process it further
V by
2. What if the production of nexalene inte lactine required additional purchasing and quality inspection activity? Every 450 galons of flexalene that undergo further processing require 22 mere purchase orders
at $9 each and 16 more quality inspection hours at $25 each. Which alternative would be better and by how much?
NOTE: Round interim calculations and your final answer to the nearest cent.
Process it further
V by
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