Beilke Corporation processes sugar beets in batches that it purchases from farmers for $53 a batch.A batch of sugar beets costs $12 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 $20 or processed further for $10 to make the end product industrial fiber that is sold for $26.The beet juice can be sold as is for $30 or processed further for $29 to make the end product refined sugar that is sold for $79.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 be processed into refined sugar
C)beet fiber should NOT be processed into industrial fiber;beet juice should NOT be processed into refined sugar
D)beet fiber should be processed into industrial fiber;beet juice should NOT be processed into refined sugar

Question

Quizplus · Accepted Answer

Beet fiber should not be processed further because the additional cost ($10) is greater than the additional revenue ($6). Beet juice should be processed further because the additional cost ($29) is less than the additional revenue ($49).

Beilke Corporation Processes Sugar Beets in Batches That It Purchases