Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dairyplus processes organic milk into plain yogurt. Dairyplus sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch. processed

image text in transcribed

Dairyplus processes organic milk into plain yogurt. Dairyplus sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch. processed at a cost of $800, yields 645 gallons of plain yogurt. The company sells the one-gallon tubs for $8.00 each and spends $0.14 for each plastic tub. Dairyplus has recently begun to reconsider its strategy. Management wonders if it would be more profitable to sell individual-sized portions of fruited organic yogurt at local food stores. Dairyplus could further process each batch of plain yogurt into 13,760 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Dairyplus would sell each individual portion for $0.44. Packaging would cost $0.07 per portion, and fruit would cost $0.10 per portion. Fixed costs would not change. Should Dairyplus continue to sell only the gallon-sized plain yogurt (sell as is) or convert the plain yogurt into individual-sized portions of fruited 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.) Sell as gallon-size Sell as individual containers portions Less: Net benefit per unit Net benefit per batch

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

College Accounting

Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille

11th edition

978-1111528300, 1111528128, 1111528306, 978-1111528126

More Books

Students also viewed these Accounting questions