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Should Organicplus continue to sell only the gallon size plain yogurt (sell as is) or convert the plain yogurt into individualsize portions of fruited yogurt
Should Organicplus continue to sell only the gallon size plain yogurt (sell as is) or convert the plain yogurt into individualsize portions of fruited yogurt (process further)? Why? (Use a minus sign parentheses for amounts that are typically shown enclosed in parentheses in a sell or process further decision) Organicplus sels plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $860, yields 300 gallons of plain yogurt. Organicplus sells the one-gallon tubs for $10 each, and spends $0.20 for each plastic tub. Organicplus has recently begun to reconsider its strategy. Organicplus wonders if it would be more profitable to sell individualsize portions of fruited organic yogurt at local food stores. Organicplus could further process each batch of plain yogurt into 6,400 individual portions (3/4 cup each) of frited yogurt. A recent market analysis indicates that demand for the product exists. Organicplus would sell each individual portion for $0.52. Packaging would cost 50.13 per portion, and fruit would cost $0.07 per portion. Fixed costs would not change. 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
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