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.

	Gold Blend	Rose Blend
Juice	$8.040	$6.226
Container/Packaging	2.929	2.500
Lids and Caps	.277	.185
Labels	.130	.075
Direct Labor	.200	.200
Overhead	.960	.960
Trade Promotion	2.00	.750

Based on the above answer the following:

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

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

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

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

Mackinac Island Contribution (%) for Gold Blend.

Mackinac Island Contribution (%) for Rose Blend.

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

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

Profit if sales estimate for Gold Blend is met.

Profit if sales objective for Rose Blend is met.

Based on the information in the question and your calculations, which alternative would you recommend and why?