The Seashore Stand is a take-out food store at a popular beach resort. Cindy Smith, owner...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Seashore Stand is a take-out food store at a popular beach resort. Cindy Smith, owner of the Seashore Stand, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: (Click to view the data.) 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. Read the requirements. Requirement 1. Calculate the contribution margin per case of each type of drink. Selling price per case Variable cost per case Contribution margin per case Natural 27.70 $ 20.90 Orange Juice 38.80 30.30 Cola Lemonade Punch $ 19.25 $ 13.80 20.60 $ 16.90 Requirement 2. A coworker of Sexton's recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with this recommendation? Explain briefly. A. This recommendation makes sense. It will allow the company to maximize their contribution margin. B. This recommendation does not make sense. The company should allocate equal shelf space to each product so the customer has plenty of options. OC. This recommendation does not make sense. It fails to recognize that the company has limited shelf space and therefore wants to maximize the contribution margin per foot of shelf space. Requirement 3. What shelf-space allocation for the four drinks would you recommend for the Seashore Stand? Show your calculations. Begin by calculating the amount that should be used to determine the allocation. (Round your answers to the nearest cent.) Natural Cola Lemonade Punch Orange Juice Allocate the shelf space to each product and show the effect it will have on the Seashore Stand's operations. (Roun Cola Lemonade Punch Natural Orange Juice Total Total Feet of per Foot of Shelf Space Shelf Space per Day Data table Selling price per case Variable cost per case Cases sold per foot of shelf space per day Natural Cola Lemonade Punch Orange Juice S 19.25 $ 20.60 $ 27.70 $ 38.80 $ 13.80 $ 16.90 $ 20.90 $ 30.30 7 20 22 4 Print Done The Seashore Stand is a take-out food store at a popular beach resort. Cindy Smith, owner of the Seashore Stand, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: (Click to view the data.) 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. Read the requirements. Requirement 1. Calculate the contribution margin per case of each type of drink. Selling price per case Variable cost per case Contribution margin per case Natural 27.70 $ 20.90 Orange Juice 38.80 30.30 Cola Lemonade Punch $ 19.25 $ 13.80 20.60 $ 16.90 Requirement 2. A coworker of Sexton's recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with this recommendation? Explain briefly. A. This recommendation makes sense. It will allow the company to maximize their contribution margin. B. This recommendation does not make sense. The company should allocate equal shelf space to each product so the customer has plenty of options. OC. This recommendation does not make sense. It fails to recognize that the company has limited shelf space and therefore wants to maximize the contribution margin per foot of shelf space. Requirement 3. What shelf-space allocation for the four drinks would you recommend for the Seashore Stand? Show your calculations. Begin by calculating the amount that should be used to determine the allocation. (Round your answers to the nearest cent.) Natural Cola Lemonade Punch Orange Juice Allocate the shelf space to each product and show the effect it will have on the Seashore Stand's operations. (Roun Cola Lemonade Punch Natural Orange Juice Total Total Feet of per Foot of Shelf Space Shelf Space per Day Data table Selling price per case Variable cost per case Cases sold per foot of shelf space per day Natural Cola Lemonade Punch Orange Juice S 19.25 $ 20.60 $ 27.70 $ 38.80 $ 13.80 $ 16.90 $ 20.90 $ 30.30 7 20 22 4 Print Done
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Adrian Webb bought 618 bricks to build a barbecue pit, paying $185.40. Find the cost per brick. (HINT: Cost per brick means the cost for one brick.) The cost per brick is s (Round to nearest hundidth)
-
Nevins Distributors Inc. is a wholesaler of oriental rugs. The following is a luncheon conversation between Pat Cameron, the assistant controller, and Cindy Bakke, an assistant financial analyst for...
-
The following selected transactions were taken from the records of Shaw Company for the first year of its operations ending December 31, 2008: Jan. 31. Wrote off account of B. Roberts, $2,400. Mar....
-
What is the meaning of each of the following terms: corporation, articles of incorporation, corporate charter, board of directors, corporate officers, and organization costs?
-
Freight car loadings over a 12-year period at a busy port are as follows: a. Determine a linear trend line for expected freight car loadings. b. Use the trend equation to predict expected loadings...
-
It is quite possible, and frequent, that a parcel of real estate has more than one current mortgage in place.Consider this example.Suppose I bought a house 5 years ago for my personal dwelling.I paid...
-
VEC Inc. currently has 1450000 zero coupon bonds outstanding, each with a face value of $1,000. The bonds have a maturity of 4 years and they are traded in the market at 87% of par. If the tax rate...
-
Identification of management assertions in respect of figures in the financial statements is a vital part of the audit process. State whether you agree with this statement, giving practical examples.
-
Auditing is a complex activity. Discuss.
-
In this era of globalization it is no longer possible for there to be national regulation. For any regulation to be effective it must be done on a global basis. Discuss.
-
Compute the population variance for the St. Louis temperatures. Compare the result with the variance for the San Francisco temperatures, and interpret the result.
-
The audit function is vital to society. Discuss.
-
Suppose you pay $1,000 to purchase a 5-year bond with a coupon payment of $40. One year later, you sell it for $1,200. The rate of return on your bond for a holding period of one year is_ Select one:...
-
Heineken N.V., a global brewer based in the Netherlands, reports the following balance sheet accounts for the year ended December 31, 2016 (euros in millions). Prepare the balance sheet for this...
-
How do we determine whether a firm is experiencing an economic loss?
-
How do we determine whether a firm is generating an economic profit?
-
Why doesnt a firm produce when price is below average variable cost?
Study smarter with the SolutionInn App