po AL AaBbCcDdEt AaBbCcDc Emphasis Heading 1 PRICING PROBLEMS The Regency Beer Company is a regular beer manufacturer located in Dallas. The beer is presently distributed in Texas, Oklahoma, New Mexico, Kansas, Arkansas and Louisiana. The company comptroller indicated the following financial situation last year: Regency case sales in units 5,000,000 Price per case to wholesalers $6.00 Costs Plant overhead Marketing overhead General Administration Advertising Production cost per case Distribution and selling cost per case $4,000,000 1,000,000 2,000,000 5,000,000 $2.00 $1.00 1. What was Regency's net profit? 2. What was the break even point in case sales? Bonus: The Bigboy, retail liquor distributor in New York was interested in buying 500,000 cases of Regency beer if the price was low enough. The marketing manager estimated that the 500,000 cases could be shipped directly to New York for $50,000 in addition to the regular distribution and selling cost. Regency decided to sell 500,000 cases to the Bigboy, retail liquor distributor at $4.00 per case. 3. How much additional contribution will Regency make by selling the beer to Bigbox? tes) Focus