RCARE Chapter 12 Homework Preble x Homework Problems O Help Prepared from a situ
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RCARE Chapter 12 Homework Preble x Homework Problems O Help Prepared from a situation suggested by Professor John W. Hardy)Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are Initially cut or to process them further into filet mignon and the New York cut If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following proft Belling price ($2.40 per pound) Less joint costs inourred up to the split-oft polst bere 2.40 7-bone steak ean be identified as a separate produot Profit per pound 0-75 If the compeny were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the flet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste costs $0.16 to further process one T-bone steak into the filet mignon and New York cuts. The filet mignon can be sold for $3.60 per pound, and the New York cut can be sold for $3.20 per pound. Required: 1. What is the financial advantage (dsadvantage) of further processing one T-bone steak into filet mignon and New York cut steaks? 2. Would you recommend that the T-bone steaks be sold as initally cut or processed further? Complete this question by entering your answers in the tabs below. Required 1Required 2 What is the financial advantage (disadvantage) of further processing one T-bone steak into filet mignon and New York eut steaks? (Do not round intermediate ca Round your answers to 2 decimal places. pet unt Prex 2015 lll Next >Explanation / Answer
Per 16-Ounce T-Bone Sales from further processing: Sales price of one filet mignon 1.35 =3.6/16*6 Sales price of one New York cut 1.6 =3.2/16*8 Total revenue from further processing 2.95 Less sales revenue from one T-bone steak 2.4 Incremental revenue from further processing 0.55 Less cost of further processing 0.16 Finanical advantage 0.39 per unit 2 T-bone steaks should be processed further.
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