Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $47 to buy from farmers and $10 to crush in the company’s plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $15 or processed further for $14 to make the end product industrial fiber that is sold for $59. The beet juice can be sold as is for $42 or processed further for $18 to make the end product refined sugar that is sold for $59.What is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is?
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