question archive Boney Corporation processes sugar beets that it purchases from farmers
Boney Corporation processes sugar beets that it purchases from farmers
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Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $40 to buy from farmers and $11 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 $16 or processed further for $15 to make the end product industrial fiber that is sold for $52. The beet juice can be sold as is for $35 or processed further for $19 to make the end product refined sugar that is sold for $52. What is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is?
Multiple Choice
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