Homework 2-Sell or Process Further Blue Bird Ice Cream processes milk into ice cream to sell to retirement homes in one-gallon containers. Each batch, processed at a cost of $600, yields 800 gallons of plain ice cream. Blue Bird sells the one-gallon tubs for $10 each, and spends $0.25 for each tub container. The company is considering a different strategy as there is demand for individual size portions with crunchy nuts added. Blue Bird can further process each batch into 15,000 individual portions that would sell for $0.90. The packaging for the smaller portion would cost $0.10 per carton and the crunchy nuts would cost $.15 (15 cents) per portion. Fixed cost would not change. Differential Analysis - Sell or Process Further Process Difference 800 Further tubs Expected Revenue from selling by the gallon s Expected Revenue from selling individual portions $ 5,500 $.25 Additional cost of selling as is in gallon tubs $ 200 each Additional cost of processing into individual portions $ Total Net Revenue $ 7. $ 9,750 $8. Sell Based on your analysis, which is more profitable.......sell by the gallon or sell individual portions