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 $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.

How much profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is?

a. $(71)

b. $(6)

c. $(39)

d. $(21)

Explanation / Answer

Answer - b. $ (6).

the working as below :-

Beet Juice selling price  if as it is sold = $ 41

Earning in Refinded sugar = $ 58- $ 23 = $ 35

Loss in Refined sugar = $ 41- $35 = $ 6

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