Dairyfood processes organic milk into plain yogurt. (Click the icon to view additional information.) further...
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Dairyfood processes organic milk into plain yogurt. (Click the icon to view additional information.) further decision.) More info Dairyfood sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $820, yields 900 gallons of plain yogurt. Dairyfood sells the one-gallon tubs for $4 each, and spends $0.18 for each plastic tub. Dairyfood has recently begun to reconsider its strategy. Dairyfood wonders if it would be more profitable to sell individual-size portions of fruited organic yogurt at local food stores. Dairyfood could further process each batch of plain yogurt into 19,200 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Dairyfood would sell each individual portion for $0.58. Packaging would cost $0.12 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change
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