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Problem 12-20 Sell or Process Further Decision (L012-7 Prepared from a situation suggested by Professor John W Hardy Lone Star Meat Packers is a major
Problem 12-20 Sell or Process Further Decision (L012-7 Prepared from a situation suggested by Professor John W Hardy Lone Star Meat Packers is a major processor of beer 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 steak as they are initially cut or to process then further into fiet moon and the New York cut the T-bone steaks are sold as intilly cut the company figures that a 1 pound T-bone steak would yeld the following profit Selling price ($2.40 per pound) Less Joint costs incurred to the split-off point where T-bone steak En be identifi s eerste educt Profit per pound If the company were to further process the bone steaks then cutting one side of a bene steak provides the filet menon and Cutting the other side provides the New York Cut Ore 16 ounce t.bone steak cut in the way will yield on 5 ouncefilet mignon and one 8 ounce New York cut the remaining ounces are waste costs $18 to further process one bone Steak into the mignon and New York Cuts. The filet mignon can be sold for $400 Der bound, and the New York cut can be sold for 53 50 per pound Required: 1 What is the financial advantage (disadvantage of further processing one T-bone steak to filetoon and New York cut steaks? 2. Would you recommend that the t.bone steaks be sold as initially out of processed further Complete this question by entering your answers in the tabs below. Required 1 Required 2 mignon and New York cut What is the financial advantage disadvantage of the processing on T-bone steak into steaks? (Do not round intermediate calculations. Round your answers to 2 decimal places perunt 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 then 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 Selling price ($2.de par pound) Less Joint costs incurred up to the split-011 point where T-bone steak can be identified as a separate product Erotit 4 HY DOI If the company were to further process the t.bone steaks, then 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 ouncefilet mignon and one 8 ounce New York cut: the remaining ounces are waste it costs $0.18 to further process one T-bone steak into the filet mignon and New York Cuts. The filet mignon can be sold for $400 per pound, and the New York cut can be sold for $3.50 per pound Required 1. What is the financial advantage disadvantage of further processing one t.bone steak into filet mignon and New York cut steaks 2. Would you recommend that the T-bone steaks be sold as initially cut or processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Would you recommend that the T-bone steaks be sold as initially cut or processed further? OT-bone steaks should be processed further OT-bone steaks should be sold as initially cut
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