Coakley Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $58 to buy from farmers and $20 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 $34 or processed further for $26 to make the end product industrial fiber that is sold for $46. The beet juice can be sold as is for $54 or processed further for $34 to make the end product refined sugar that is sold for $80. How much profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is? |
rev: 08_07_2013_QC_33489
$(41)
$(60)
$(8)
$(12)
Answer is ($8)
Particulars | Amount |
Selling price | 80 |
Costs: | |
Further process costs | 34 |
Lost selling price at split off | 54 |
Total costs | 88 |
Loss | (8) |
Coakley Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $58...
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