Dairyplus processes organic milk into plain yogurt

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Dairyplus sells plain yogurt tohospitals, nursinghomes, and restaurants inbulk, one-gallon containers. Eachbatch, processed at a cost of $890, yields 1,050 gallons of plain yogurt. Dairyplus sells theone-gallon tubs for $8 each, and spends $0.22 for each plastic tub. Dairyplus has recently begun to reconsider its strategy. Dairyplus wonders if it would be more profitable to sellindividual-size portions of fruited organic yogurt at local food stores. Dairyplus could further process each batch of plain yogurt into 22,400 individual portions(3/4 cupeach) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Dairyplus would sell each individual portion for $0.46. Packaging would cost $0.15 perportion, and fruit would cost $0.10 per portion. Fixed costs would not change.

Should Dairyplus continue to sell only thegallon-size plain yogurt(sell asis) or convert the plain yogurt intoindividual-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 furtherdecision.)