Boney Corporation processes sugar beets that it purchases from farmers. Sugar be
ID: 2594437 • Letter: B
Question
Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $44 to buy from farmers and $30 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 $14 or processed further for $51 to make the end product industrial fiber that is sold for $99. The beet juice can be sold as is for $62 or processed further for $55 to make the end product refined sugar that is sold for $99. What is the financial advantage (disadvantage) for the company from processing one batch of sugar beets into the end products industrial fiber and refined sugar? Multiple Choice $(4) per batch $18 per batch $(180) per batch $28 per batch
Explanation / Answer
Answer is $18 per batch
Combined fnal sales value ($99 + $99) 198 Less Further Processing 51+55 106 sugar beets costs 44 Cost to Crush 30 Financial advantage 18