Sohr Corporation processes sugar beets that it purchases from farmers. Sugar bee
ID: 2497365 • Letter: S
Question
Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $66 to buy from farmers and $25 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 $36 or processed further for $41 to make the end product industrial fiber that is sold for $89. The beet juice can be sold as is for $57 or processed further for $45 to make the end product refined sugar that is sold for $89.
How much profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar?
$(4)
$1
$23
$(177)
Sohr Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $66 to buy from farmers and $25 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 $36 or processed further for $41 to make the end product industrial fiber that is sold for $89. The beet juice can be sold as is for $57 or processed further for $45 to make the end product refined sugar that is sold for $89.
Explanation / Answer
TOTAL COST OF PROCUREMENT & PROCESSING
Cost Price of one batch of sugar beets from farmar = $66
Crushing cost of sugar beets = $25
Beet fiber processing cost to product Industrial fiber = $41
Beet Juice processing cost to product refined sugar = $45
TOTAL COST OF PROCUREMENT & PROCESSING = $177
Total Sales price of final product industrial fiber & refined sugar = $89 + $89 = $178
$1 Profit is made by the Company by processing one batch of sugar beets into the end products industrial fiber and refined sugar.
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