Determine whether the company should sell beta2

Assignment Help Financial Accounting

Reference no: EM133497249

Sell or Process Further Decision

Severco Mining processes a newly discovered mineral (Burgo) into joint products Alpha1 and Beta2. The Raw Material Burgo costs $15 per pound. It costs $125 to convert 100 pounds of Burgo into 60 pounds of Alpha1 and 40 pounds of Beta2.

Product Alpha1 can be sold immediately at a cost of $15 per pound or it can be processed further into a new product Alpha-Plus at an extra cost of $8 per pound. The Alpha-Plus can then be sold at a price of $35 per pound.

Product Beta2 can be sold immediately at a cost of $14 per pound or it can be processed further into a new product Beta-Plus at an extra cost of $22 per pound. The Beta-Plus can then be sold at a price of $30 per pound.

Question 1:) Determine whether the company should sell Alpha1 as is or spend the extra money to convert it to Alpha-Plus and sell it that way.
Question 2:) Determine whether the company should sell Beta2 as is or spend the extra money to convert it to Beta-Plus and sell it that way.

Reference no: EM133497249

Questions Cloud

Developing an accurate financial statement : Data points necessary for developing an accurate financial statement. · Educate the staff on accuracy and what data points are necessary when developing

Why do you believe argument you are making in your response : Why do you believe the argument you are making in your response is correct or valid? What data or examples can you include to support your perspective?

Identify the agencies involved in investigating hate crimes : Identify the agencies involved in investigating hate crimes. Identify the challenges involved in investigating hate crimes.

Discusses three principles of ethical decision making : Discusses three principles of ethical decision making, explain, what they mean. give an example of how they would apply in a particular ethical situation.

Determine whether the company should sell beta2 : Determine whether the company should sell Beta2 as is or spend the extra money to convert it to Beta-Plus and sell it that way.

Does blockchain technology have the potential to cause shift : Does Blockchain technology have the potential to cause a shift in financial business practices that many experts are predicting? Explain why or why not.

Do you think is best means of controlling such behavior : Given the internal and external anti-corruption options. What do you think is the best means of controlling such behavior? Explain your answer.

Discuss how you could answer a single research question : Discuss how you could answer a single research question through qualitative and quantitative data.

Evaluate the project using the npv rule and the irr rule : The firm's marginal federal-plus-state tax rate is 22 percent and the project's cost of capital is 8 percent. Evaluate the project using the NPV rule

User Account

All Pages