Unformatted text preview: contribution of no more than 2.8 million ounces in each case for the manufacturing of the 5 ½ ounce aerosol container and the 10 ounce aerosol container in addition to the continued production of the 5 ½ ounce tube package. 4) With the negotiated 20,000 unit min. order for each package size they it will cost them around 6k to do the test market. The total cost is 40k and with $1.70 profit with ea can x 20,000k cans =34k profit => 6k sunk cost. However, the pro of testing the market will give the company further insight into how the consumer market will react giving them the best way to maximize profits. 5) I think the current products life cycle has matured and they are in need of a new image/ product in order to continue to grow....
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- Spring '08
- Contribution Margin, Aerosol spray, Darren Nussel, oz tube