10:14 Gierlach Beet Processors Inc., processes sugar beets in batches. A batch o

Question

10:14

Gierlach Beet Processors Inc., processes sugar beets in batches. A batch of sugar beets costs $27 to buy from farmers and $17 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $27 or processed further for $14 to make the end product industrial fiber that is sold for $34. The beet juice can be sold as is for $32 or processed further for $29 to make the end product refined sugar that is sold for $58. How much more profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is?

Explanation / Answer

Profit on processing the intermediate product Juice Selling Price =58 26 58-32 Cost -29 Loss -3 The correct answer is C. -$ 3

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