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I CHECKED MY WORK AND EVERYTHING IS RIGHT EXCEPT Less cost of further processing. How do I find that row? (Prepared from a situation suggested
I CHECKED MY WORK AND EVERYTHING IS RIGHT EXCEPT "Less cost of further processing". How do I find that row?
(Prepared from a situation suggested by Professor John W. Hardy.) Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into filet mignon and the New York cut If the T-bone steaks are sold as Initially cut, the company figures that a 1-pound T- bone steak would yield the following profit $240 Selling price ($240 per pound) Less Joint costs incurred up to the split-off point where T-bone steak can be identified as a separate product 1.50 Profit per pound As mentioned above. Instead of being sold as Initially cut, the T-bone steaks could be further processed into filet mignon and New York cut steaks. Cutting one side of a T- bone steak provides the filet mignon, and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut the remaining ounces are waste. The cost of processing the T-bone steaks Into these cuts is $0.13 per pound. The filet mignon can be sold for $4.00 per pound, and the New York cut can be sold for $3.30 per pound. Required: 1. Determine the profit per pound from processing the T-bone steaks Into filet mignon and New York cut steaks. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Per 16-Ounce T-Bone Sales from further processing: Sales price of one filet mignon s Sales price of one New York cut Total revenue from further processing Less sales revenue from one T-bone steak Incremental revenue from further processing Less cost of further processing Profit loss) per pound from further processing 5 2. Would you recommend that the T-bone steaks be sold as Initially cut or processed further? T-bone steaks should be sold as Initially cut. T-bone steaks should be processed furtherStep by Step Solution
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