Asked by Veronica Lovtsova on Jun 13, 2024
Verified
Vannorman Corporation processes sugar beets in batches.A batch of sugar beets costs $78 to buy from farmers and $18 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 $25 or processed further for $16 to make the end product industrial fiber that is sold for $57.The beet juice can be sold as is for $39 or processed further for $22 to make the end product refined sugar that is sold for $84.How much profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar rather than not processing that batch at all?
A) $(134)
B) $(32)
C) $7
D) $39
Industrial Fiber
Man-made or natural fibers primarily used in the production of durable goods and industrial products instead of consumer apparel.
Refined Sugar
Sugar that has been processed to remove impurities and achieve a high level of purity and whiteness.
Crushing Process
In mining and industry, refers to the operation of reducing a material’s size by applying force, breaking it into smaller pieces for further processing or use.
- Examine the cost-effectiveness of further manufacturing of products as opposed to trading them as work-in-progress items.
Verified Answer
Learning Objectives
- Examine the cost-effectiveness of further manufacturing of products as opposed to trading them as work-in-progress items.
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