Please do the full chart. Thank you! Dairyfood processes organic milk into plain yogurt.
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Should Dairyfood continue to sell
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More info
Dairyfood processes organic milk into plain yogurt.
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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.)
Costs
Expected revenue from selling
Expected revenue from selling in
Additional costs of selling as is
Total net revenue
Decision: Based on this analysis,
Dairyfood sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $800, yields 150 gallons of plain yogurt. Dairyfood sells the one-gallon tubs for $8 each, and spends $0.16 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 3,200 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 $0.52. Packaging would cost $0.11 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change.
Decision: Based on this analysis, it is more profitable to sell Dairyfood processes organic milk into plain yogurt
(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.)
Decision: Based on this
Dairyfood processes organic milk into plain yogurt. Click the icon to view additional information. Should Dairyfood continue to sell More info
into plain yogurt
one-gallon containers. Each batch, processed at a cost of $800, yields 150 gallons. Dairyfood sells plain yogurt to hospitals, nursing homes, and restaurants in bulk of plain yogurt. Dairyfood sells the one-gallon tubs for $8 each and spends $0.16 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 3,200 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 $0.52. Packaging would cost $0.11 per portion, and fruit would cost $0.09 per portion. Fixed costs would not change.
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Costs
Expected revenue from selling Expected revenue from selling
by the gallon
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Dairyfood processes organic milk into plain yogurt. Click the icon to view additional information. minus sign or parentheses for amounts that are typically shown enclosed in parentheses in a sell or process further decision.
Process Further
Sell As Is
Difference
Costs
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 Decision: Based on this analysis, it is more profitable to
plain yogurt in bulk containers
