Assignment task: Sell or Process Further
Port Allen Chemical Company processes raw material D into joint products E and F. Raw material D costs $5 per liter. It costs $100 to convert 100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold immediately for $5 per liter or processed further into Product G at an additional cost of $2 per liter. Product G can then be sold for $10 per liter.
Determine whether Product F should be sold or processed further into Product G.
Calculate the net advantage (disadvantage) of further processing.
Use a negative sign with your answer to indicate a net disadvantage (if applicable).