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Discuss the allocation of costs

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Details: As a result of the orange juice manufacturing process, SSOG produces a large amount of orange peel waste. The operations manager would like to propose a use for the orange peel waste?an essence of orange room-deodorant spray. Discuss the advantages and disadvantages of by-product processing.

Please include references.

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Solution Summary

This solution is comprised of a detailed explanation to discuss the advantages and disadvantages of by-product processing.

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There are many production processes that begin with a single raw material and end up with two or more final products and byproducts. A prime example involves the many final products that come from a barrel of crude oil that ends up being kerosene, regular and unleaded gasoline, and other petroleum products.

The raw material is treated as a single product up until a point in production called the split-off point. At this point the single ...

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