Boney Corporation Processes Sugar Beets That It Purchases from Farmers

question 400

Multiple Choice

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 $15 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 $20 or processed further for $19 to make the end product industrial fiber that is sold for $52. The beet juice can be sold as is for $35 or processed further for $23 to make the end product refined sugar that is sold for $52.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) ($65)
• B) ($6)
• C) ($39)
• D) ($21)

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