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Natural Foods, Inc. buys strawberries to produce whole natural strawberry jelly. The variable cost of a case of strawberry jelly is: Additionally, the company has
Natural Foods, Inc. buys strawberries to produce whole natural strawberry jelly. The variable cost of a case of strawberry jelly is: Additionally, the company has fixed costs per year of $980,000. The company inspects the product at various stages. Management is considering purchasing high-quality strawberries. This would increase materials cost to $11 per case, while decreasing inspection costs to $1 per case. All other variable and fixed costs would remain the same whether or not the highquality strawberries were purchased. Natural Foods, Inc. sells their jelly for $40 per case and sells 79,100 cases per year. If the company switched to the high-quality strawberries they could sell 100,100 cases per year at the same $40 price. Should Natural Foods, Inc. purchase the high-quality strawberries
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