Sohr Corporation processes sugar beets that it purchases from farmers. Sugar bee

Question

Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $65 to buy from farmers and $24 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 $35 or processed further for $39 to make the end product industrial fiber that is sold for $87. The beet juice can be sold as is for $56 or processed further for $43 to make the end product refined sugar that is sold for $87.

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?

Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $65 to buy from farmers and $24 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 $35 or processed further for $39 to make the end product industrial fiber that is sold for $87. The beet juice can be sold as is for $56 or processed further for $43 to make the end product refined sugar that is sold for $87.

Explanation / Answer

Combined final sales value ($87 + $87) $174 Less costs of producing the end products: Cost of sugar beets $65 Cost of crushing $24 Combined costs of further processing ($39 + $43) $82 $171 Profit (loss) $3

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