Rock Inc., processes grapes in batches. A batch of grapes co…
Rock Inc., processes grapes in batches. A batch of grapes costs $36 to buy from farmers and $10 to crush in the company’s plant. Two intermediate products, grape pulp and grape juice, emerge from the crushing process. The grape pulp can be sold as is for $24 or processed further for $16 to make the end product industrial fiber that is sold for $36. The grape juice can be sold as is for $44 or processed further for $34 to make the end product wine that is sold for $70. What is the financial advantage (disadvantage) for the company from processing the intermediate product grape juice into wine rather than selling it as is?