Paine Corporation Processes Sugar Beets in Batches That It Purchases

question 96

Multiple Choice

Paine Corporation processes sugar beets in batches that it purchases from farmers for $72 a batch. A batch of sugar beets costs $11 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 $27 or processed further for $16 to make the end product industrial fiber that is sold for $40. The beet juice can be sold as is for $43 or processed further for $28 to make the end product refined sugar that is sold for $100. Which of the intermediate products should be processed further?

• A) beet fiber should NOT be processed into industrial fiber; beet juice should be processed into refined sugar
• B) beet fiber should NOT be processed into industrial fiber; beet juice should NOT be processed into refined sugar
• C) beet fiber should be processed into industrial fiber; beet juice should NOT be processed into refined sugar
• D) beet fiber should be processed into industrial fiber; beet juice should be processed into refined sugar

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Definitions:

Liable

Being legally responsible or accountable, usually in the context of paying damages or fulfilling obligations.

Transferable Interest

The aspect of an owner's interest in a business that can be transferred or sold to another party.

Creditor

An entity or person to whom money is owed by a debtor or borrower.

Efficient Manager

An individual who is effective at organizing resources and processes to achieve specific goals with minimum waste.