In this question, we are asked to calculate the total new revenues for the WIP program. 

We are told that the cost of cans under the WIP program are set fo $20. 

However, in the calculations, we take the non-WIP can sales to be sold at $25. 

I am confused on the logistics involved: Does this mean that the customer under the WIP program is given a exemptionary privilege to purchase the can at $20 whereas the normal, non-WIP customer pays the standard $25 rate?

Additionally, because this is a baby formula producer, doesn't the WIP program only work for retailers in e.g. supermarkets? I'd have thought that the supermarket purchases from the producer at a specific unit price and then applies a mark-up to sell to the customer at a profit as per supply chain logistics. 

My impression is that this has been simplified to assume only the producer supplies directly to the customer without a retailer or wholesaler involved.