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Orga nicmaid processes organic milk into plain yogurt. Organicmaid sells plain yogurt to hospitals. nursing homes, and restaurants in bulk, onegallon containers. Each batch, processed
Orga nicmaid processes organic milk into plain yogurt. Organicmaid sells plain yogurt to hospitals. nursing homes, and restaurants in bulk, onegallon containers. Each batch, processed at a cost of 5370' yields 570 gallons of plain yogurt. The company sells the one-gallon tubs for $6.00 each and spends $0.14 for each plastic tub. Organicmaid has recently begun to reconsider its strategy. Management wonders if it would be more protable to sell individualsized portions of fmited organic yogurt at local food stores. Organicmaid could furlher process each batch of plain yogurt into 12'160 individual portions (3M cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Organicmaid would sell each individual portion for $0.52. Packaging would cost $0.05 per portion. and fruit would cost $0.10 per portion. Fixed costs would not change. Should Organicm aid continue to sell only the gallonsized plain yogurt (sell as is} or convert the plain yogurt into individualsized portions of fruited yogurt {process further}? Why? Calculate the net benet per hatch under each alternative. {Enter a "0" for any zero amounts. Round the ne benet per batch to the nearest whole dollar.) Sell as gallonsize Sell as individual containers portions -9851 Net bene'lt per unit :x Net bene 'It per batch S Additional processing costs per unit-adding fruit ne Additional processing costs per unit-packaging De rt Contribution margin Contribution margin per unit Fixed expenses '0 Fixed expenses per unit Number of units produced per batch Number of units produced per year Sales revenue per unit Net benefit per batch
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