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Dairymaid processes organic mik into plain yogurt. Dairymaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers, Each batch, processed at
Dairymaid processes organic mik into plain yogurt. Dairymaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers, Each batch, processed at a cost of $690, yiekts 525 gallons of plain yogurt. The company sells the one-gallon tubs for $8.00 each and spends $0.16 for each plaste tub. Dairymaid has recently begun to reconsider its strategy. Mansgement wonders i it would be more profitable to sell individual-sized portions of truted organic yogurt at local food stores. Dairymaid could further process each batch of plain yogurt into 11,200 individual portions (3/4 cup each) of fruited yegurt. A recent market analysis indicates that demand for the product exists. Dairymaid would sell each individual portion for $0.46. Packaging would cost $0. 08 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change. Should Dairymaid continue to sell only the gallon-sized plain yogurt (sell as is) or convert the plain yogurt into individual-sized portions of truiled yogurt (process further)? Why? Calculate the net benefit per batch under each alternative. (Enter a " 0 " for any zero amounts. Round the net benefit per batch to the nearest whole dollar.) Based on this analysis, it is more profitable to sell As long as
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