Kosakowski Corporation processes sugar beets in batches. A batch of sugar beets
ID: 2402254 • Letter: K
Question
Kosakowski Corporation processes sugar beets in batches. A batch of sugar beets costs $69 to buy from farmers and $17 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 $26 or processed further for $16 to make the end product, industrial fiber that is sold for $42. The beet juice can be sold as is for $45 or processed further for $23 to make the end product, refined sugar that is sold for $90. How much more profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar? o $18 $(125) O $(25)Explanation / Answer
Answer
If processed further
Beet Fibre
Beet Juice
Total
A
Sales
$ 42.00
$ 90.00
$ 132.00
B
Further processing cost
$ 16.00
$ 23.00
$ 39.00
C = $ 69 + $ 17
Cost already incurred
$ 86.00
D = A - B - C
Profit (Loss) at this stage
$ 7.00
If processed further
Beet Fibre
Beet Juice
Total
A
Sales
$ 42.00
$ 90.00
$ 132.00
B
Further processing cost
$ 16.00
$ 23.00
$ 39.00
C = $ 69 + $ 17
Cost already incurred
$ 86.00
D = A - B - C
Profit (Loss) at this stage
$ 7.00
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