Reference no: EM132894345

Arizonia Mass Sugar, Inc., processes sugar cane that it purchases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs $60 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 $29 or processed further for $13 to make the end product industrial fiber that is sold for $61. The cane juice can be sold as is for $40 or processed further for $28 to make the end product molasses that is sold for $67.

Problem 1: What is the financial advantage (disadvantage) for the company from processing one batch of sugar cane into the end products industrial fiber and molasses?

Select one:

a.($114) per batch
b.$18 per batch
c.$14 per batch
d.($4) per batch