Sohr Corporation Processes Sugar Beets That It Purchases from Farmers

question 98

Multiple Choice

Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $50 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 $58. The beet juice can be sold as is for $41 or processed further for $23 to make the end product refined sugar that is sold for $58.
-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 be processed into refined sugar
• D)beet fiber should be processed into industrial fiber;beet juice should NOT be processed into refined sugar

---

Definitions:

Cost of Goods Manufactured

The total cost incurred to produce goods that are completed within a specific accounting period.

Schedule of Cost

A detailed report showing the total costs incurred for a specific project or production process over a set period.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used as a measure in calculating labor costs and efficiency.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to products based on a selected activity base.