Should baldo sell gammazine or deltazine

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Reference no: EM13134565

The Phoenix plant of Baldo Chemical processes alphazine into betazine and gammazine. A batch consists of 20,000 gallons of alphazine, costing $11,000. Processing costs are $52,000, and results in 14,000 gallons of betazine and 6,000 gallons of gammazine. Raw material and processing costs are allocated to the two products based on number of gallons. Betazine can be sold for $15/gallon. Gammazine can be sold for $9/gallon, or it can be processed into deltazine. Deltazine can be sold for $12/gallon. Additional processing costs for a batch of deltazine are $15,500. Should Baldo sell gammazine or deltazine? Explain.

Reference no: EM13134565

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