Question 32 (of 40) Save&Exir; Su Time remaining: 0:50:58 32. Bowdish Corporatio
ID: 2588711 • Letter: Q
Question
Question 32 (of 40) Save&Exir; Su Time remaining: 0:50:58 32. Bowdish Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two intermediate products-peels and depeeled spuds. The peels can then be processed further to make a cocktall of organic nutrients. And the depeeled spuds can be processed further to make frozen french fries A batch of potatoes costs $42 to buy from farmers and $10 to peel in the company's plant The peels produced from a batch can be sold as is for animal feed for $24 or processed further for $15 to make the cocktail of nutrients that are sold for $44. The depeeled spuds can be sold as is for $35 or processed further for $24 to make frozen french fries that are sold for $56 Required a. Assuming that no other costs are involved in processing potatoes or in selling products, how much money does the company make from processing one batch of potatoes into the cocktal of organic nutrients and frozen french fries? (Input the amount as a b. Should each of the intermediate products, peels and depeeled spuds, be sold as is or processed further into an and product? (Loss amounts should be indicated with a minus sign.) il of Frozen Nutrients French Fries Incremental Profit loss) trom furthor processing O Type here to searchExplanation / Answer
Answer A.
Selling price for the company ( Coctail + French fries) = $44 +$56 = $100
Less: Costs
Potato Cost = $42
Peel Cost =$10
Further process to coctail cost = $15
French fries process cost = $24
Total Cost =$91
Income to company = $100 - $91 = $9.
Answer B.
Coccktail Case.
Profit = $24 -$10(peel cost) =$14.
Profit = $44-$10(peel Cost)-$15( process cost) = $19.
Hence, peels should be processed and sold for $44.
French Fries Case.
Profit = $35.
Profit = $56-$24(Process Cost) =$32.
Since, the profit is more without further processing, hence spuds has to be sold outside without further processing.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.