Question

JIS Pinal Question Instructions The management of Dominican Sugar Company is considering whether to process further raw sugar into refined Red and raw sugar can be sold without further processing for $1.36 per pound. Raw sugar is produced in batches of 42.000 pounds pro cane, which costs $0.33 per pound of cane. Rofined sugar will require additional processing costs of $0.51 per pound of raw and 123 produce 1 pound of refined sugar

Answer 1

Page Date: __/ /_Page No.: Alternative 1: Sell Raw Sugar $ 57120 Revenue, per batch (42000 pounds X $1.36) . Costs per batch a | 100000 pounds x 0.33 $). ($ 33000) Income per batch $ 24120 Alternative 2: Prouss further into refined sugar Revenue, per batch $72912 42000 x 1 pound X $ 2 .17 ($ 21470) costs, per batch Add honed processing cost - (42000x 0.51) cost of sugarcane (100000 x 0.33) ($ 33000 2 Incom per batch $18492

Date: __Page No.: Page ① Differential Suyor or sell Rome Analysis Rown foother into refined sugar sell raw Sugor (Alternative 1) Prous - further into refined sugar (Alternative 2) Differention effect or Income Calternative 2) Revenue pux batch cost perbatch Income per batch $57120 $33000 $24120 - $72912 $54420 $18492 $ 15792 $ 21420 ($ 5628) Decision - Sell row sugar