Respuesta :
Answer:
Sugar
Beets
-$ 78,0 Farmers
-$ 18,0 Crush Into the Company
Beet Fiber Beet Juice
-$ 96,0 -$ 16,0 -$ 22,0 Processed further
$ 57,0 $ 84,0 Price
$ 7,0 -$ 7,0 $ 14,0 Profit/Loss
Explanation:
If the company process one batch at all it will be profit for one product and loss to other.
In the case of the Beet Fiber the company get a loss of ($7) and with the Beet Juice get a profit of $14
The difference it´s in the contribution margin of each product, the Beet Juice has a better margin than Beet Fiber this let the Beet Fiber in better conditions to cover the cost of processing the Sugar Beet which are share 50/50 with the Beet Fiber.
The company can make the total profit of $39 on processing one batch of sugar beets into end products.
What is profit?
Profit refers to the financial gain realized by a business on carrying on its operations. It is the difference between the sales value and the cost.
The profit/loss of Vannorman Corporation after processing sugar beets into industrial fiber and refined sugar is:
[tex]\begin{aligned}\rm Combined\final\:sale\:value\:of\:both\:products &= \$57 + \$84\\\\&= \$141\end[/tex]
[tex]\begin{aligned}\rm Combined\further\:processing\:cost\:of\:both\:products &= \$16 + \$22\\\\&= \$38\end[/tex]
Given:
[tex]\begin{aligned} \rm Cost\:of\:sugar\:beets &= \$78\\\rm Cost\:of\:crushing &= \$18\end[/tex]
Therefore profit will be:
[tex]\rm Profit = 141 - 78 - 18 - 38\\\\\rm Profit =\$7[/tex]
If the company prefers to sale the products before processing, profit will be:
[tex]\rm Profit = (25+39) - 78 - 18\\\\\rm Profit = (32)[/tex]
Therefore the company can eliminate the loss of $32 and earn a profit of $7 after further processing. Therefore the total profit will be $32+47=$39.
Hence the correct option is D.
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