Question
Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $51 to buy
Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $51 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 $63. The beet juice can be sold as is for $46 or processed further for $20 to make the end product refined sugar that is sold for $63.
How much more profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is? |
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