Naturalmaid processes organic milk into plain yogurt.

should naturalmaid continue to sell only the gallon size plain yogurt (sell as is) or convert the plain yogurt into individual-size portions of fruited yogurt (process further)? Why?

Naturalmaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $840, yields 300 gallons of plain yogurt. Naturalmaid sells the one-gallon tubs for $10 each, and spends $0.18 for each plastic tub. Naturalmaid has recently begun to reconsider its strategy. Naturalmaid wonders if it would be more profitable to sell individual-size portions of fruited organic yogurt at local food stores. Naturalmaid could further process each batch of plain yogurt into 6,400 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 $0.56. Packaging would cost $0.08 per portion, and fruit would cost $0.08 per portion. Fixed costs would not change. Process Further Costs Sell As Is Difference Expected revenue from selling by the gallon Expected revenue from selling individual portions Additional costs of selling as is by the gallon Additional costs of processing individual portions Total net revenue