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(Prepared from a situation suggested by Professor John W Hardy) Lone Star Meat Packers is a major 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 filet mignon and the New York cut If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit Selling price ($2.00 per pound) $ 2.00 Les joint costs incurred up to the split off point where T-bone steak can be identified as a separate product 1.45 Profit per pound $ 0.55 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 yield one 6 ounce niet mignon and one 8 ounce New York cut the remaining ounces are waste. It costs 5012 to further process one T-bone steak into the filet mignon and New York cuts. The filet mignon can be sold for $440 per pound, and the New York cut can be sold for $3.80 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disavantage of further processing one T-bone steak into filet mignon and New York cut Steaks? (Do not round intermediate calculations. Round your answer to 2 decimal places) per unit

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