Question
Stinehelfer Beet Processors, Incorporated, processes sugar beets in batches. A batch of sugar beets costs $38 to buy from farmers and $12 to crush in
Stinehelfer Beet Processors, Incorporated, processes sugar beets in batches. A batch of sugar beets costs $38 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 $22 or processed further for $14 to make the end product industrial fiber that is sold for $34. The beet juice can be sold as is for $42 or processed further for $36 to make the end product refined sugar that is sold for $72. What is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is?
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