Naturalmaid processes organic milk into plain yogurt. Naturalmaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $840, yields 615 gallons of plain yogurt. The company sells the one-gallon tubs for $7.00 each and spends $0.16 for each plastic tub. Naturalmaid 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. Naturalmaid could further process each batch of plain yogurt into 13,120 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Naturalmaid would sell each individual portion for $0.58. Packaging would cost $0.08 per portion, and fruit would cost $0.10 per portion. Fixed costs would not change. Should Naturalmaid 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?

Naturalmaid processes organic mik into plain yogurt. Naturalmaid sells plain yogurt to hosptais, nursing hemes, and restaurants in bulk, one-galon containers. Each bscict, processed at a cost of would cost $0.08 per portion, and fruit would cost $0.10 per portion. Fired costs would not change. Should Naturalmaid continue to selt only the gallon-siced plain yogurt (sell as is) or comvert the plah yogurt into individualsized porticns of fruited yogurt (process further)? Why