Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please complete all the requirements (This is Managerial Accounting) Organicplus processes organic milk into plain yogurt. Organicplus sells plain yogurt to hospitals, nursing homes, and

Please complete all the requirements (This is Managerial Accounting)

image text in transcribed Organicplus processes organic milk into plain yogurt. Organicplus sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $820, yields 615 gallons of plain yogurt. The company sells the one-gallon tubs for $7.00 each and spends $0.14 for each plastic tub. Organicplus 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. Organicplus 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. Organicplus would sell each individual portion for $0.58. Packaging would cost $0.05 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change. Should Organicplus 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? Calculate the net benefit per batch under each alternative. (Enter a "0" for any zero amounts. Round the net benefit per batch to the nearest whole dollar.) Sell as gallon-size Sell as individual containers portions Less: Net benefit per unit Net benefit per batch

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_2

Step: 3

blur-text-image_3

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

Question

Discuss the determinants of direct financial compensation.

Answered: 1 week ago