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Seasonal Scents, Inc. is a small batch manufacturer of reed diffusers. The essential oils used in the mixture are purchased from a supplier in 4
Seasonal Scents, Inc. is a small batch manufacturer of reed diffusers. The essential oils used in the mixture are purchased from a supplier in 4 ounce bottles. The supplier has offered Seasonal Scents two different shipping models to choose from: either (1) Seasonal Scents can pay a flat shipping cost of $50 per month regardless of the number of bottles ordered or (2) Seasonal Scents can pay $5 per bottle ordered. Which of the following statements is correct? OA. At a monthly purchase volume of 10 bottles, Seasonal Scents will be indifferent between the two shipping options. B. Shipping option 1 is considered the lower operating leverage shipping option. OC. If Seasonal Scents expects to purchase 12 bottles a month, its shipping costs would be higher under shipping option 1 than under shipping option 2. D. The unit contribution margin per diffuser would be higher under shipping option 2. E. More than one of the above statements is correct. Seasonal Scents, Inc. is a small batch manufacturer of reed diffusers. The essential oils used in the mixture are purchased from a supplier in 4 ounce bottles. The supplier has offered Seasonal Scents two different shipping models to choose from: either (1) Seasonal Scents can pay a flat shipping cost of $50 per month regardless of the number of bottles ordered or (2) Seasonal Scents can pay $5 per bottle ordered. Which of the following statements is correct? OA. At a monthly purchase volume of 10 bottles, Seasonal Scents will be indifferent between the two shipping options. B. Shipping option 1 is considered the lower operating leverage shipping option. OC. If Seasonal Scents expects to purchase 12 bottles a month, its shipping costs would be higher under shipping option 1 than under shipping option 2. D. The unit contribution margin per diffuser would be higher under shipping option 2. E. More than one of the above statements is correct
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