90.2K

Verified Solution

Link Copied!

Please help with this problem

Dairyfood processes organic milk into plain yogurt (1) (Click the icon to view additional information.) Should Dairyfood continue to sell only the gallon-size plain yogurt (sell as is) or convert the plain yogurt into individual-size portions of fruited yogurt (process further)? Why? (Use a minus sign or parentheses for amounts that are typically shown enclosed in parentheses in a sell or process further decision.) Dairyfood sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $860, yields 900 gallons of plain yogurt. Dairyfood sells the one-gallon tubs for $9 each, and spends $0.20 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 $0.46. Packaging would cost $0.12 per portion, and fruit would cost $0.10 per portion. Fixed costs would not change

Answer & Explanation Solved by verified expert

See Answer