Business, 16.04.2020 04:17 sudotoxic

Werner Natural Dairy processes organic milk into plain yogurt. Werner sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $ 850, yields 540 gallons of plain yogurt. The company sells the one-gallon tubs for $ 8.00 each and spends $ 0.16 for each plastic tub. Werner 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. Werner could further process each batch of plain yogurt into 11 comma 520 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Werner would sell each individual portion for $ 0.56. Packaging would cost $ 0.07 per portion, and fruit would cost $ 0.10 per portion. Fixed costs would not change. Should Werner 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?

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Werner Natural Dairy processes organic milk into plain yogurt. Werner sells plain yogurt to hospital...

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