Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Options sell fruited youghurt as individual portions or plain yourgurt in bulk 4 L container as long as there is demand for individual portion or

image text in transcribedOptions sell fruited youghurt as individual portions or plain yourgurt in bulk 4 L container as long as there is demand for individual portion or the demand continues for bulk 4 L

image text in transcribedI inserted this 2nd table just to help further

Dairymaid processes organic milk into plain yogurt. Dairymaid sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, 4-L containers. Each batch, processed at a cost of $820, yields 2,000 (500 4-L containers) of plain yogurt. Dairymaid sells the 4-L tubs for $5.00 each and spends $0.16 for each plastic tub. Dairymaid has recently begun to reconsider its strategy. Dairymaid wonders if it would be more profitable to sell individual-size portions of fruited organic yogurt at local food stores. Dairymaid could further process each batch of plain yogurt into 10,526 individual portions (190 mL each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Dairymaid would sell each individual portion for $0.46. Packaging would cost 50.05 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change. Should Dairymaid continue to sell only the 4-L tubs of plain yogurt (sell as-is) or convert the plain yogurt into individual-sized portions of fruited yogurt (process further)? Why? Calculate the net benefit per batch under each alternative. (If any of the values are zero, leave the cells blank. Round the net benefit per batch to the nearest whole dollar.) Sell as 4-L size containers Sell as individual portions Less: Net benefit per unit Net benefit per batch Based on this analysis, it is more profitable to sell as long as Sell as 4-L size Sell as individual portions containers Sales revenue per unit Less: Additional processing costs per unit-packaging Additional processing costs per unit-adding fruit Net benefit per unit Number of units produced per batch Net benefit per batch X X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions