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Svetlanka
1 month ago
7

Drew Cane Products, Inc., processes sugar cane in batches. The company buys a batch of sugar cane from farmers for $90 which is

then crushed in the company's plant at a cost of $11. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $21 or processed further for $13 to make the end product industrial fiber that is sold for $45. The cane juice can be sold as is for $41 or processed further for $29 to make the end product molasses that is sold for $103.
What is the financial advantage (disadvantage) for the company from processing one batch of sugar cane into the end products industrial fiber and molasses rather than not processing that batch at all?
Business
1 answer:
arsen [2.9K]1 month ago
7 0

Answer:

The monetary benefits gained from processing the batch into two final products totals $44.

Explanation:

- The profit from converting can fiber to industrial fiber is determined as:

  + Selling price of industrial fiber - selling price of can fiber - expenses for conversion = 45 - 21 - 13 = $11.

- The profit from transforming can juice into molasses is calculated as:

  + Selling price of molasses - selling price of can juice - expenses for conversion = 103 - 29 - 41 = $33.

The combined financial advantage from converting the batch into both products is summed up as: Profit from can fiber to industrial fiber + Profit from can juice to molasses = 11 + 33 = $44.

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