The rise or fall in a price is an example of Inflation risk.
Answer:
Best diary should continue to sell in gallons.
Explanation:
For sales in gallons per batch
Gross revenue per batch = 7 * 615 = 4305
Cost of gallons per batch = 0.14 * 615 = 86.1
Fixed cost of processing yogurt/batch = 870
Net profit /batch = 4305 - 86.1 - 870 = $3348.9
-Proposed sales of individual sized potions per batch
Portions /batch = 13120
Gross revenue of portions /batch =13120 * 0.4 = 5248
Cost of fruits in portions /batch = 13120 * 0.11 = 1443.2
Cost of packaging/batch = 13120 * 0.05 = 656
Fixed cost of yogurt processing/batch = 870
Net profit of portions /batch = 5248 - 1443.2 - 656 -870 = $2278.8
So therefore :
Profit difference between the two types of market sales.
= $1070.1
Gallon sales make more profit than portion sales so it is not advisable to convert to portion sale market because it would reduce net profit by $1070.1
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