Duarte Corporation processes sugar beets that it purchases from farmers.Sugar beets are processed in batches.A batch of sugar beets costs $31 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 $27 or processed further for $14 to make the end product industrial fiber that is sold for $44.The beet juice can be sold as is for $32 or processed further for $29 to make the end product refined sugar that is sold for $50. Which of the intermediate products should be processed further?
A)beet fiber should be processed into industrial fiber;beet juice should be processed into refined sugar
B)beet fiber should NOT be processed into industrial fiber;beet juice should NOT be processed into refined sugar
C)beet fiber should be processed into industrial fiber;beet juice should NOT be processed into refined sugar
D)beet fiber should NOT be processed into industrial fiber;beet juice should be processed into refined sugar

Question

Quizplus · Accepted Answer

Beet fiber should be processed further because the additional revenue ($44 - $27 = $17) exceeds the additional processing cost ($14). Beet juice should not be processed further because the additional revenue ($50 - $32 = $18) is less than the additional processing cost ($29).

Duarte Corporation Processes Sugar Beets That It Purchases from Farmers