Wholesome Dairy processes milk. The cost of the milk processing is $1,390,000. Wholesome is looking to increase its net is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make of ice cream. Product Milk Ice Cream Units Produced 834,000 gallons Selling Price $ 3.11 per gallon 6.25 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 $ 0.34 per half gallon

Wholesome Dairy processes milk. The cost of the milk processing is $1,390,000. Wholesome is looking to increase its net is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make of ice cream. Product Milk Ice Cream Units Produced 834,000 gallons Selling Price $ 3.11 per gallon 6.25 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 $ 0.34 per half gallon

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6MC: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling...

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The Dairy Division of Concord Corporation produces and sells milk to outside customers. The operation has the capacity to produce 200000 gallons of milk a year. Last year’s operating results were as follows: Sales (150000) gallons $675000 Variable costs 292500 Contribution margin 382500 Fixed costs 100000 Net Income $ 282500 Assume the Dairy Division is operating at capacity. If the Yogurt Division wants to purchase 40000 gallons of milk from the Dairy Division, what is the minimum price that will allow the Dairy Division to maintain its current net income? $1.88 per gallon $4.50 per gallon $1.95 per gallon $2.55 per gallon
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Farm Dairy has a process that results in 1,000 liters of milk that can be sold for $2 per liter and cost per liter is $1 per liter. An alternative would be to process milk further at an additional cost of $2 and then sell it as cream for $5 per liter. Should management sell milk now or should cream be processed further and then sold? Select one: a. Sell now; the company will be better off by $3,000. b. Process further; the company will be better off by $3,000. c. Sell now; the company will be better off by $2,000. d. Process further; the company will be better off by $2,000
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Heavenly Dessert processes cocoa beans into cocoa powder at a processing cost of $9,500 per batch. Heavenly Dessert can sell the cocoa powder as is, or it can process the cocoa powder further into either chocolate syrup or boxed assorted chocolates. Once processed, each batch of cocoa beans would result in the following sales revenue: 1(Click the icon to view the sales revenue amounts and additional information.) Has the president made the right or wrong decision? Explain your answer. Be sure to include the correct financial analysis in your response. Begin by completing the following incremental analysis to compare selling the cocoa powder as is with processing it further. (For amounts with a value of $0, make sure to enter "0" in the appropriate input box.) Sell as Cocoa Powder Sell as Chocolate Syrup Sell as Boxed Assorted Chocolates Revenue Less: Additional processing costs Net benefit…
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