Oran Refiners, Inc., processes sugar cane that it purchases from farmers. Sugar

Question

Oran Refiners, Inc., processes sugar cane that it purchases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs $76 to buy from farmers and $18 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 $21 or processed further for $12 to make the end product industrial fiber that is sold for $43. The cane juice can be sold as is for $47 or processed further for $21 to make the end product molasses that is sold for $88.

Which of the intermediate products should be processed further?

Explanation / Answer

Cane fiber Profit without processing = $21- 0 = $21 Profit with processing = $43 -$12 = $31 Cane fiber should be processed Cane Juice Profit without processing = $47- 0 = $47 Profit with processing = $88 -$21 = $67 Cane Juice should be processed If you have to choose only one intermediate product then Cane Juice should be processed

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.