Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Retailers markup (in dollars) per case for Gold Blend. In other words, how much will a retailer earn selling a case of Gold Blend?

image text in transcribed

1. Retailers markup (in dollars) per case for Gold Blend. In other words, how much will a retailer earn selling a case of Gold Blend?

2. Retailers markup (in dollars) per case for Rose Blend. In other words, how much will a retailer earn selling a case of Rose Blend?

3. Mackinac Island Contribution (dollars/case) for Gold Blend.

4. Mackinac Island Contribution (dollars/case) for Rose Blend.

5. Mackinac Island Contribution (%) for Gold Blend.

6. Mackinac Island Contribution (%) for Rose Blend.

7. Number of units needed to break-even for Gold Blend.

8. Number of units needed to break-even for Rose Blend.

9. Profit if sales estimate for Gold Blend is met.

10. Profit if sales objective for Rose Blend is met.

You are the new marketing director for a manufacturer of shelf stable juices that are sold under the Mackinac Island Grower (MIG) label. Your juices are sold to retail grocery chains in the Midwest. The general manager has asked you to compare the profitability of two potential products M.I. Gold (Gold) and Michigan Rose (Rose) blend. The company has two alternatives for converting pure grape juice into bottled juice. It can be bottled as a premium juice and sell an estimated 15,000 cases under the Gold label. Or, the juice can be diluted (under the Rose label) and sell approximately 31,000 cases. The suggested retail price of the Gold label would be $58.50, while the Rose label would retail for $36.85. Retailers earn a 35% markup on the retail selling price, while distributors earn a margin of 10%. The company estimates that fixed costs will be $120,000 for the Gold label and $85,000 for the Rose label. The following table summarizes the variable cost per case for each alternative. Rose Blend Juice Container/Packaging Lids and Caps Labels Direct Labor Overhead Trade Promotion Gold Blend $8.040 2.929 .277 .130 .200 .960 2.00 $6.226 2.500 .185 .075 .200 1960 .750 Based on the above answer the following

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Whispers In The Auditing Room

Authors: Azhar UL Haque

1st Edition

B0C63ZTK27, 979-8223789352

More Books

Students also viewed these Accounting questions

Question

2. Define communication.

Answered: 1 week ago