Utah Soy Products (USP) buys soybeans and processes them into other soy products. Each ton of soybeans
Question:
Utah Soy Products (USP) buys soybeans and processes them into other soy products. Each ton of soybeans that USP purchases for $ 400 can be converted for an additional $ 210 into 675 pounds of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $ 1.12 and soy oil can be sold in bulk for $ 4.50 per gallon. USP can process the 675 pounds of soy meal into 825 pounds of soy cookies at an additional cost of $ 380. Each pound of soy cookies can be sold for $ 2.12 per pound. The 80 gallons of soy oil can be packaged at a cost of $ 260 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $ 1.15.
Required
1. Should USP process each of the products further?
2. Describe a situation where the decision model might conflict with the performance- evaluation model?
Step by Step Answer:
Managerial Accounting Decision Making and Motivating Performance
ISBN: 978-0137024872
1st edition
Authors: Srikant M. Datar, Madhav V. Rajan