Determine whether hawaiian sugar company should sell sugar

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Question - The management of Hawaiian Sugar Company is considering whether to process further raw sugar into refined sugar. The refined sugar can be sold for $1.85 per pound. The raw sugar can be sold without further processing for $1.10 per pound.

Raw is produced in batches of 20,000 pounds by processing 90,000 pounds of sugar cane, which costs $0.25 per pound. Refined sugar requires further processing costs of $0.33 per pound of raw sugar. It takes 1.25 pounds of raw sugar to produce 1 pound of refined sugar.

Required - Prepare an analysis to determine whether Hawaiian Sugar Company should sell the raw sugar now or process it further into refined sugar? Please show supporting computations to support your answer.

Reference no: EM132975053

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