Wehn Refiners Inc. , processes sugar cane that it purchases from farmers.Sugar cane is processed in batches.A batch of sugar cane costs $40 to buy from farmers and $13 to crush in the company's plant.Two intermediate products, cane fiber and cane juice, emerge from the crushing process.The cane fiber can be sold as is for $28 or processed further for $18 to make the end product industrial fiber that is sold for $37.The cane juice can be sold as is for $31 or processed further for $25 to make the end product molasses that is sold for $66. How much more profit (loss)does the company make by processing one batch of sugar cane into the end products industrial fiber and molasses?
A)$(96)
B)$1
C)$7
D)$6

Question

Quizplus · Accepted Answer

To determine the profit from processing one batch of sugar cane, we need to compare the revenue from selling the intermediate products as they are versus the revenue from processing them further into the end products.

Revenue from selling cane fiber and cane juice as they are: 
Cane fiber: $28
Cane juice: $31
Total revenue: $28 + $31 = $59

Revenue from processing cane fiber and cane juice into industrial fiber and molasses: 
Industrial fiber: $18 cost to process + $37 revenue = $19 profit 
Molasses: $25 cost to process + $66 revenue = $41 profit 
Total profit: $19 + $41 = $60

Therefore, the company makes $60 - $59 = $1 more profit by processing one batch of sugar cane into the end products. The answer is (B).