Stinehelfer Beet Processors, Incorporated, Processes Sugar Beets in Batches

question 294

Multiple Choice

Stinehelfer Beet Processors, Incorporated, processes sugar beets in batches. A batch of sugar beets costs $45 to buy from farmers and $19 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 $21 or processed further for $13 to make the end product industrial fiber that is sold for $33. The beet juice can be sold as is for $41 or processed further for $39 to make the end product refined sugar that is sold for $79. 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?

• A) ($28)
• B) $60
• C) ($1)
• D) $18

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Definitions:

Sample Space

The set of all possible outcomes or results that can occur from a specific action or a random experiment.

Sample Space

The set of all possible outcomes of a probabilistic experiment.

Probabilities

Measures of the likelihood that an event will occur, expressed as numbers between 0 and 1, where 1 denotes certainty.

Outcome

A possible result or effect of an action, situation, or experiment, which can be measured, observed, or evaluated.