Mae Refiners, Inc

question 169

Multiple Choice

Mae Refiners, Inc., processes sugar cane that it purchases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs $60 to buy from farmers and $13 to crush in the company's plant. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $29 or processed further for $13 to make the end product industrial fiber that is sold for $61. The cane juice can be sold as is for $40 or processed further for $28 to make the end product molasses that is sold for $67.
-What is the financial advantage (disadvantage) for the company from processing one batch of sugar cane into the end products industrial fiber and molasses?

• A) ($4) per batch
• B) ($114) per batch
• C) $18 per batch
• D) $14 per batch

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Definitions:

Voluntary Process

An action or procedure undertaken freely without coercion.

Negotiation

Negotiation is a dialogue between two or more parties aimed at reaching a mutually beneficial agreement or resolving a conflict.

Established Set of Rules

An established set of rules refers to the formally agreed upon or widely recognized guidelines that govern behaviors or activities within a specific context or organization.

Dilemma of Honesty

The conflict between the desire to be truthful and the potential negative consequences of disclosing unfavorable information.