Problem 12-20 Sell or Process Further [LO12-7] Prepared from a situstion suggested by Professor John W. Hardy.) Lone Star Mest Packers is a major processor of beef and other mest 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 flet mignon and the New ork cu. If the T-bone steaks sre sold as initially cut, the company figures thst bone stesk would yield the following profit 1-pound T 200 Selling price ($2.00 per pound) Less joint costs incurred up to the split-off point where 1.55 T-bone stesk can be identified as a sepsrate product 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 ofT- 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 remsining ounces are waste. The cost of processing the T-bone steaks into these cuts is $0.16 per pound. The filet mignon can be sold for $3.60 per pound, and the New York cut can be sold for $3.80 per pound. 1. Determine the profit per pound from processing the T-bone stesks into filet mignon and New York cut steaks. (Do not round Intermediate calculations. Round your answers to 2 declmal places.) Sales from further processing Sales price af ane filet mignon Sales price of ane New Yark cut Total revenue fram further Less sales revenue from one T-bone steak Incremental revenue frorm further Less cost of further processing Profit(loss) per pound fram further processing 2. Would you recommend that the T-bone steaks be sold as initially cut or processed further? O T-bone steaks should be sold as initially cut O T-bone steaks should be processed further