Keuing Inc. plans to have a new single-cup coffee brewing system for small offices throughout the US. Unlike traditional coffee system is proprietary. Only Keurig coffee. Paged as K-cups will work with Keurig brewer.

The factor cost of a brewer is $82 and K-cups are 10 cents. The inventment in production equipment for the cups costs about $400,000 and that for the packaging line is $60,000.

The company plans to sell s starter system consists of a brewer and 200 K-cups to offices via
Wholesalers take 25% markup on the price for the brewer and 50% markup on K-cups.

The Wholesalers will auto-ship K-cups to replenish supplies.
The list price to offices is $200 a brewer and 50 cents per cup.

*Set up 2 tables for channel pricing & add the numbers for a system.

1) The selling price of a Starter system for offices $_____

2) The Seeling price of a system to Wholesaler is $_______

3) Unit Brewer contribution to Keuig Inc. is $________

4) Unit K-cup contribution to Keuig Inc. is $________

5) Unit contribution of a starter system to Keuig Inc. is $________

6) Number of system required Break-even is _________

7) Assuming that an office charges the employee of 50% markup on retail. The Price employee for each coffee brewed from a K-cup is $____________