A company acquired 900 pounds of Material A at a total cost…
A company acquired 900 pounds of Material A at a total cost of $10,000. The company then processed the 900 pounds of Material A into 700 pounds of Material B and 200 pounds of Material X at a cost of $5,000. Material B can be sold for $50 per pound. However, the company also has the option to process the 700 pounds of Material B into 550 pounds of material C (150 pounds are lost in the conversion process). The processing costs would amount to $4,000. The market value of material C is $75 per pound. If the company chooses to process material B into material C, what is the effect on profitability?