Stinehelfer Beet Processors, Inc., processes sugar beets in batches. A batch of

Question

Stinehelfer Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $42 to buy from farmers and $16 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 $18 or processed further for $10 to make the end product industrial fiber that is sold for $30. The beet juice can be sold as is for $38 or processed further for $40 to make the end product refined sugar that is sold for $76. What is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is?

Explanation / Answer

Revenue if processed further 76 Revenue if sold as is 38 Incremental revenue 38 Additional costs 40 Financial advantage (disadvantage) -2

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.