Durant Co. manufactures glass bottles for dairy products. The contribution margin is $0.24 per bottle. Durant...
Durant Co. manufactures glass bottles for dairy products. The contribution margin is $0.24 per bottle. Durant just received notification that one of its orders for 135.000 bottles contained misprinted labels and thus had to recall and reprint the bottle labels. If it will cost $0.17 per bottle to reprint the labels and $1,000 to reship the bottles, what will the not contributor margin be after the recall?
Homework Answers
Total Contribution margin = 135,000 bottles x $0.24 per bottle = $32,400
Less: Reprinting Cost = 135,000 bottles x $0.17 per bottle = $22,950
Less : Reshipping Cost = $1000
Net Contribution Margin = $8,450
Net Contribution Margin Per unit = $8,450 / 135,000 = 0.063
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