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Dairymaid processes organic milk into plain yogurt. ( Click the icon to view additional information. ) or process further decision: ) table [ [

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Dairymaid processes organic milk into plain yogurt.
(Click the icon to view additional information.) or process further decision:)
\table[[Costs,Sell As Is],[Expected revenue from selling by the gallon,Process],[Further,]]
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Dairymaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $860, yields 900 gallons of plain yogurt. Dairymaid sells the one-gallon tubs for $6 each, and spends $0.18 for each plastic tub. Dairymaid has recently begun to reconsider its strategy. Dairymaid wonders if it would be more profitable to sell individual-size portions of fruited organic yogurt at local food stores. Dairymaid could further process each batch of plain yogurt into 19,200 individual portions (3/4 cup each) of fruited yogurt A recent market analysis indicates that demand for the product exists. Dairymaid would sell each individual portion for $0.60. Packaging would cost $0.07 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change.
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