Show transcribed image text Organicmaid processes organic milk
Show transcribed image text Organicmaid processes organic milk into plain yogurt. Organicmaid sells plain yogurt to hospitals nursing homes and restaurants in bulk one-gallon containers. Each batch processed at a cost of $850 yields 630 gallons of plain yogurt. The company sells the one-gallon tubs for $6.00 each and spends $0.16 for each plastic tub. Organicmaid 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. Organicmaid 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. Organicmaid would sell each individual portion for $0.52. Packaging would cost $0.05 per portion and fruit would cost $0.11 per portion. Fixed costs would not change. Should Organicmaid 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 0 for any zero amounts. Round the net benefit per batch to the nearest whole dollar.)
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