2. Samantha, a sales agent of Babylon Ice cream, noticed that shelf space in the front refrigerator affects the sales of ice creams and now she is trying to decide how much refrigerator space to devote to four different ice creams. Related data on these four ice creams are as follows:

Light FrenchItalian Organic

Selling price per case $8.75 $10.50 $7.75 $9.30

Variable cost per case $3.75 $6.50 $5.75$6.30

Ice Cream cups sold per

meter of shelf space per day 12 22 36 43

Samantha has a maximum front shelf space of 12 meters to devote to the four ice creams. She wants a minimum of 1 meter and a maximum of 6 meters of front shelf space for each ice cream.

a. Calculate the contribution margin per cup of each type of ice cream.

b. A friend of Samantha recommends that she should maximize the shelf space devoted to those ice creams with the highest contribution margin. Evaluate this recommendation.

c. Keeping in mind the preference of Samantha (min. 1 meter and max. 6 meters), what shelf-space allocation for the four ice creams would you recommend in order to maximize total contribution margin? Show your calculations.

3. Babylon rents a delivery truck by paying monthly rental payment of $400 and the operating and other costs of the truck is $10 per kilometer.

Draw the graph to show the cost line of delivery truck and write the cost equation.