Wholesome Dairy processes milk. The cost of the milk processing is $1,280,000. Wholesome is looking to increase its net income and is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make a half gallon of ice cream. Product Milk Ice Cream Units Produced 768,000 gallons ? Selling Price $ 3.00 per gallon 6.04 per half gallon Required: 1. How many half gallons of ice cream can Wholesome make? 2. What are the additional processing costs to convert the milk to ice cream? 3. Should Wholesome sell the milk or process it further and sell ice cream? Additional Processing costs. $ 0.23 per half gallon
Wholesome Dairy processes milk. The cost of the milk processing is $1,280,000. Wholesome is looking to increase its net income and is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make a half gallon of ice cream. Product Milk Ice Cream Units Produced 768,000 gallons ? Selling Price $ 3.00 per gallon 6.04 per half gallon Required: 1. How many half gallons of ice cream can Wholesome make? 2. What are the additional processing costs to convert the milk to ice cream? 3. Should Wholesome sell the milk or process it further and sell ice cream? Additional Processing costs. $ 0.23 per half gallon
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Wholesome Dairy processes milk. The cost of the milk processing is $1,280,000. Wholesome is looking to increase its net income and
is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make a half gallon
of ice cream.
Product
Milk
Ice Cream
Units Produced
768,000 gallons
?
Required 1
Required:
1. How many half gallons of ice cream can Wholesome make?
2. What are the additional processing costs to convert the milk to ice cream?
3. Should Wholesome sell the milk or process it further and sell ice cream?
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
Selling Price
$ 3.00 per gallon
6.04 per half gallon
How many half gallons of ice cream can Wholesome make?
Number of half gallons of ice cream
< Required 1
Required 2 >
Additional Processing costs
$ 0.23 per half gallon
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