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5. Dairyfood processes organic milk into plain yogurt. Dairyfood sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $840, yields 630 gallons of plain yogurt. The company sells the one-gallon tubs for $8.00 each and spends $0.10 for each plastic tub. Dairyfood 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. Dairyfood could further process each batch of plain yogurt into 13,440 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 $0.40. Packaging would cost $0.07 per portion, and fruit would cost $0.12 per portion. Fixed costs would not change. Should Dairyfood 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 "O" for any zero amounts. Round the net benefit per batch to the nearest whole dollar.) LE Sell as gallon-size Sell as individual containers portions (1) Less: (2 (3) Net benefit per unit (4) Net benefit per batch Based on this analysis, it is more profitable to sell (5) As long as (6) 1 O Additional processing costs per unit-adding fruit O Additional processing costs per unit-packaging o Contribution margin Number of units produced per year O Sales revenue per unit Contribution margin per unit 0 Fixed expenses O Fixed expenses per unit Number of units produced per batch (2) O Contribution margin per unit Additional processing costs per unit-adding fruit O Fixed expenses O Additional processing costs per unit-packaging Fixed expenses per unit O Contribution margin Number of units produced per batch Number of units produced per year Sales revenue per unit (3) O Contribution margin per unit Additional processing costs per unit-adding fruit O Fixed expenses O Additional processing costs per unit-packaging O Fixed expenses per unit O Contribution margin Number of units produced per batch Number of units produced per year Sales revenue per unit (4) Additional processing costs per unit-adding fruit Additional processing costs per unit-packaging Contribution margin Number of units produced per year Sales revenue per unit Contribution margin per unit Fixed expenses Fixed expenses per unit Number of units produced per batch (5) plain yogurt in bulk gallon containers fruited yogurt as individual portions (6) D there is a demand for the individual portions the demand continues for bulk gallon containers

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