Sell or Process Further

Ecolab produces cleaning and sanitizing chemicals for commercial markets. Assume the company processes raw material D into joint products E and F. Raw material D costs $8 per liter. It costs $150 to convert 100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold immediately for $40 per liter or processed further into Product G at an additional cost of $12 per liter. Product G can then be sold for $55 per liter.

Determine whether Product F should be sold or processed further into product G.

. Calculate the net advantage (disadvantage) of further processing.

. Use a negative sign to indicate a net disadvantage (if Applicable).