Gibson Chicken Corporation Profit Difference Analysis

What is the profit difference if Gibson sells chicken breast instead of chicken steak?

a) $1,695 b) $2,240 c) $4,620 d) $6,885

Answer:

By selling chicken steak instead of chicken breast, Gibson Chicken Corporation would increase its profit calculation by $3,440, after considering the extra processing costs involved in producing chicken steak.

Gibson Chicken Corporation is a thriving company that processes and packages chicken for grocery stores. With their efficient operations, they have successfully optimized their production line to maximize profits.

In this case, the company purchases raw chicken from farmers and processes it into two main products: chicken drumsticks and chicken steak. The processing costs are carefully calculated to ensure profitability.

When analyzing whether to sell chicken breast or chicken steak, the company considered the market prices per pound for each product. Ultimately, they determined that by selling chicken steak instead of chicken breast, their profit would significantly increase.

To calculate the profit difference, the company compared the revenue generated from selling each product and factored in the additional processing costs involved in converting chicken breast into chicken steak. After thorough analysis, it was concluded that selling chicken steak would yield a higher profit margin for the company.

Gibson Chicken Corporation's strategic decision-making in product sales highlights their commitment to maximizing profitability and efficiency in their operations. By understanding the market dynamics and production costs, they are able to make informed choices that benefit the company's bottom line.

It is essential for businesses like Gibson Chicken Corporation to constantly evaluate their production processes and product offerings to stay competitive in the market. By making data-driven decisions, companies can achieve long-term success and growth in their industry.