Gierlach Beet Processors, Inc., processes sugar beets in batches. A batch of sugar beets costs $27 to buy from farmers and $17 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 $34. 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 $58. How much more profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than selling it as is?
A)$(47)
B)$(20)
C)$(3)
D)$(25)

Question

Quizplus · Accepted Answer

The additional profit from processing beet juice into refined sugar is calculated by subtracting the additional processing cost from the additional revenue gained. The additional revenue from selling refined sugar instead of beet juice is $58 - $32 = $26. The additional cost of processing is $29. Therefore, the additional profit is $26 - $29 = -$3, indicating a loss of $3.