Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $47 to buy from farmers and $12 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 $17 or processed further for $16 to make the end product industrial fiber that is sold for $55. The beet juice can be sold as is for $38 or processed further for $20 to make the end product refined sugar that is sold for $55.

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?

Garrison 16e Rechecks 2017-12-15

Multiple Choice

($65)

($3)

($33)

($18)