Stevens Plastics processes recycled plastics into various new plastic products, in 5 different grades. Each of the grades can be sold immediately upon processing the recycled plastic, or processed further and sold as a higher quality plastic product. The following table lists the five products produced from each batch of recycled plastic, the tons of each product per batch, and the prices for the intermediate and finished products. The net cash outflow to convert each intermediate product into a finished product is $12 per ton. The net cash outflow to process one batch of recycled plastics into the five separate grades is $800.

Outputs	# of Tons/Batch	Intermediate Sales (Price/Ton)	Finished Sales (Price/Ton)
G1	1	75	88
G2	2	68	82
G3	4	62	73
G4	3	60	71
G5	6	40	57

REQUIRED:

a) Given that Stevens Plastics processes batches of recycled plastics into the five grades of plastic products, which of the five grades of plastic products should be sold as intermediate products (i.e., not processed further), and which ones should be sold as finished products (i.e., processed further)? Complete the table below to determine outcomes.

b) If Stevens Plastics cost to process recycled plastics into the five grades of plastic products is $800, should Stevens Plastics process recycled plastics?

c) Assuming that the quantities and prices in the preceding table do not change, how high can the $800 cost to process one batch rise before Stevens Plastics stops processing recycled plastics into the five grades of plastic products?

a.

Outputs	Tons per Batch	Intermed. Sls Price	Finished Sls Price	Costs Beyond Split off	Net cash flow of further processing	Process Further (y/n)?	Max. net cash flow/unit	Total net cash flow
G1					-		-	-
G2					-		-	-
G3					-		-	-
G4					-		-	-
G5					-		-	-
Total	0							-

b.

c.