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E8-51B. Sell as is or process further (Learning Objective 7) OrganicPlus processes organic milk into plain yogurt. OrganicPlus sells plain yogurt to hospitals, nursing homes,

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E8-51B. Sell as is or process further (Learning Objective 7) OrganicPlus processes organic milk into plain yogurt. OrganicPlus sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, onegallon containers. Each batch, processed at a cost of $830, yields 750 gallons of plain yogurt. OrganicPlus sells the one-gallon tubs for $6.00 each and spends $0.10 for each plastic tub. Management has recently begun to reconsider its strategy. OrganicPlus wonders if it would be more profitable to sell individual-sized portions of fruited organic yogurt at local food stores. OrganicPlus 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. OrganicPlus would sell each individual portion for $0.40. Packaging would cost $0.07 per portion, and fruit would cost $0.12 per portion. Fixed costs would not change. Should OrganicPlus 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

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