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 $66.
-How much more profit (loss) does the company make by processing the intermediate product cane juice into molasses rather than selling it as is?
A)$(43)
B)$(17)
C)$10
D)$(3)

Question

Quizplus · Accepted Answer

The additional profit from processing cane juice into molasses is $10. The cost to process is $25, and the selling price of molasses is $66, resulting in a net gain of $41 ($66 - $25). Selling cane juice as is would yield $31, so the additional profit is $41 - $31 = $10.