ADP Mining Company mines an iron ore called Alpha. During themonth of August, 418,000 tons of Alpha were mined and processed ata cost of $751,500. As the Alpha ore is mined, it is processed intoDelta and Pi, where 60% of the Alpha output becomes Delta and 40%becomes Pi. Each product can be sold as is or processed into therefined products Super Delta and Precision Pi. Selling prices forthese products are as follows:

	Delta			SuperDelta			Pi			Precision Pi
Selling price	$	21	/ton	$	23	/ton	$	20	/ton	$	24	/ton

Processing costs to refine Delta into Super Delta are$3,260,400; processing costs to refine Pi into Precision Pi are$501,600.

Required:

a-1. What would be the incremental profit orloss per unit if Delta is refined into Super Delta? (Lossamounts should be indicated with a minus sign.)

a-2. What would be the incremental profit orloss per unit if Pi is refined into Precision Pi?

a-3. Should Delta be sold as is or refined intoSuper Delta?

	a. Delta should be sold as is.
	b. Delta should be processedfurther and sold as Super Delta.

a-4. Should Pi be sold as is or refined intoPrecision Pi?

	a. Pi should be processed furtherand sold as Precision Pi.
	b. Pi should be sold as is.

b. Identify any costs in the problem that arenot relevant to this decision.

	a. The $751,500 cost incurred toproduce the Alpha ore is not relevant.
	b. Processing costs to refine Deltainto Super Delta are not relevant.
	c. Processing costs to refine Piinto Precision Pi are $501,600 not relevant.

c. What is the maximum profit that ADP MiningCompany can expect to earn from the production of the 418,000 tonsof Alpha?