Coakley Beet Processors,Inc

question 8

Multiple Choice

Coakley Beet Processors,Inc. ,processes sugar beets in batches.A batch of sugar beets costs $48 to buy from farmers and $10 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 $24 or processed further for $16 to make the end product industrial fiber that is sold for $36.The beet juice can be sold as is for $44 or processed further for $28 to make the end product refined sugar that is sold for $70.How much profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is?

• A)$(31)
• B)$(60)
• C)$(2)
• D)$(12)

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Definitions:

Cost Centre

A division or department within an organization that does not directly generate revenue but incurs costs, used to monitor and control expenses.

Performance Measure

Indicators used to evaluate the efficiency, effectiveness, and impact of an organization's actions towards achieving predefined objectives.

Standard Cost Variances

The differences between the expected (standard) costs of goods or services and the actual costs incurred.

Contribution Margin Ratio

A financial metric indicating the percentage of each sales dollar that contributes to covering fixed costs and generating profit.