4 Problem 12-20 Sell or Process Further Decision [LO12-7 (Prepared from a situation suggested by Professor John W. Hardy) Lone Star Meat Packers is a mejor processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into flet mignon and the New York cut 10 points f the T-bone steaks are sold as initially cut the company Sgures that a , pound T-bone steak would yield the following proft: elo k Print References Selling priee ($2.40 per pound) Less joint costa incurred up to the split-off point vbere z-bone steak can be identified as a separate produet Profit per pound # 2.40 1.20 1.20 If the company were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the filet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yileld one 6-ounce filet mignon and one 8-ounce New York cut the remaining ounces are waste. It costs $0.13 to further process one T-bone steak into the filet mignon and New York cuts. The fllet mignon can be sold for $4.00 per pound, and the New York cut can be sold for $3.70 per pound Required: 1 What is the financial advantage (disadvantage) of further processing one T-bone steak into filet mignon and New York cut steaks? 2. Would you recommend that the T-bone steaks be sold as initially cut or processed further