Business, 25.06.2020 02:01 highschoolboy

The Beach Umbrella Beach Umbrella is aâ take-out food store at a popular beach resort. Susanâ Sexton, owner of the Beach Umbrella Beach Umbrellaâ, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are asâ follows: Cola Lemonade Punch Natural Orange Juice
Selling price per case $18.80 $20.75 $26.90 $39.30
Variable cost per case $13.80 $16.25 $20.10 $30.10
Cases sold per foot of shelf space per day 7 12 24 6

Sexton has a maximum front shelf space of 12 feet to devote to the four drinks. She wants a minimum of 1 foot and a maximum of 6 feet of front shelf space for each drink.

Required:

a. Calculate the contribution margin per case of each type of drink.
b. A coworker of Sexton's recommends that she maximize the shelf space devoted to these drinks with the highest contribution margin per case. do you agree with this recommendation? explain briefly.
c. What shelf-space allocation for the four drinks would you recommend for the Snack Shack?

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The Beach Umbrella Beach Umbrella is aâ take-out food store at a popular beach resort. Susanâ Sexton...

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