Mountain Man Lager Case Summary

Not launch Mountain Man Light at all. By not introducing the light beer we incur no additional advertising and SG&A expenses. Instead, MMBC can focus on its core customers and the main product, Mountain Man Lager. To reduce diminishing sales the market price per barrel can be increased from $97 to $100 (the $97 price per barrel is calculated by taking Net Revenue in 2005/ Number of barrels sold in 2005). This would result in a 3.1% increase to the already limited contribution margin of $30.07 per barrel. At $97 per barrel it takes 39,907 barrels sold to break even and at $100 per barrel it takes only 36,287 barrels.