Question
The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.23 per
The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.23 per pound, and raw sugar can be sold without further processing for $1.45 per pound. Raw sugar is produced in batches of 43,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.34 per pound of cane. Refined sugar will require additional processing costs of $0.48 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar.
Score: 27/51
Differential Analysis |
Sell Raw Sugar (Alternative 1) or Process Further into Refined Sugar (Alternative 2) |
March 24 |
1 |
| Sell Raw Sugar | Process Further into Refined Sugar | Differential Effect on Income |
2 |
| (Alternative 1) | (Alternative 2) | (Alternative 2) |
3 | ||||
4 | ||||
5 |
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