Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dairymaid processes organic milk into plain yogurt. (Click the icon to view additional information.) Should Dairymaid continue to sell only the gallon-size plain yogurt (sell

image text in transcribed

Dairymaid processes organic milk into plain yogurt. (Click the icon to view additional information.) Should Dairymaid continue to sell only the gallon-size plain yogurt (sell as is) or convert the plain yogurt into individual-size portions of fruited yogurt (process further)? Why? (Use a minus sign or parentheses for amounts that are typically shown enclosed in parentheses in a sell or process further decision.) Process Further Costs Sell As Is Difference Expected revenue from selling by the gallon Expected revenue from selling individual portions Additional costs of selling as is by the gallon Additional costs of processing individual portions Total net revenue - More Info Dairymaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $890, yields 750 gallons of plain yogurt. Dairymaid sells the one-gallon tubs for $4 each, and spends $0.22 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 16,000 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 $0.62. Packaging would cost $0.05 per portion, and fruit would cost $0.15 per portion. Fixed costs would not change. Print Done Enter any number in the edit fields and then click Check

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions