Week 10 Quiz Quiz Help Save & Exit Mae Refners, Inc.processes sugar cane that t

Question

Week 10 Quiz Quiz Help Save & Exit Mae Refners, Inc.processes sugar cane that t purchases from farmers. Sugar cane is processe hases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs $60 to buy from farmers and $13 to crush in the company's plant. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $29 or processed further for $13 to make the end product industrial fiber t for $40 or processed further for $28 to make the end product molasses that is sold for $67 hat is sold for $61. The cane juice can be sold as is batch of sugar cane into the end products industrial fiber and What is the financial advantage (disadvantage) for the company from processing one molasses rather than not processing that batch at all? ($4) per batch

Explanation / Answer

Answer:

Total cost of processing one batch of sugar cane into end product:

Buying Cost                                     =          $60

Crusing Cost                                    =          $13

Further Crusing Cost                       =          $13

Aditional Cost                                 =          $28

Total Cost                                       =          $114

Selling price of each batch = $61 + $67 = $128

Hence, Financial Advantage = $128 - $114

                                                 = $14

The right option is $14 per batch.

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