Managerial Accounting

Free Version

Upgrade subject to access all content


Soup Inc.: Which Soups Should They Make (Process Further)?


Soup Inc. makes six kinds of broth, selling mostly to restaurants who want to create their own soups from the broth base. Soup Inc. is considering processing some of the broth further into their own line of soups. The sales price per pint of plain broth and ready-to-eat soups are shown below along with the ounces of added food items needed to create the new soups.

Soup Inc. Price Broth Price Soup ounces food
Veggie Delight \$1.60 \$8.00 18
Beef and Potatoes \$1.60 \$11.80 29
Chicken and Stars \$1.60 \$9.00 24

The cost of the food items are all similar, averaging \$0.50 per ounce, except the veggie which is only \$.10 per ounce.

Which of the soups should Soup Inc. considering making and selling?

Highlight Answer(s) Below

Veggie Delight Beef and Potatoes Chicken and Stars