=+8-22 KK Relevant costs, contribution margin, product emphasis OBJECTIVES 2, 5 The Beach Shack is a take-away food store at a popular beach. Susan Pratt, owner of the Beach Shack, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows:

Cola Lemonade Flavoured milk Natural orange juice Selling price per case $18.80 $20.00 $27.10 $39.20 Variable cost per case $14.20 $16.10 $20.70 $30.20 Cases sold per metre of shelf space per day 25 24 4 5 Susan has a maximum front shelf space of 12 metres to devote to the four drinks. She wants a minimum of 1 metre and a maximum of 6 metres of front shelf space for each drink.

330 Chapter 8: Decision making and relevant information M08_HORN3377_02_LT_C08.indd 330 2/09/13 3:42 PM Required 1 Calculate the contribution margin per case of each type of drink.