Each morning, Larry Preston stocks the drink case at Larry's Beach Hut in Long Beach, California. Larry's Beach Hut has 130 linear feet of refrigerated display space for cold drinks. Each linear foot can hold either five 12-ounce cans or three 20-ounce plastic or glass bottles. (Click the icon to view the information on the cold drinks.) The beverage stand can sell all drinks stocked in the display case each morning. Read the requirements Requirement 1. What is the constraining factor at Larry's Beach Hut? What should Larry stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? The constraining factor is linear feet of shelf space Larry's should stock the drink with the highest contribution margin. Complete the product mix analysis to determine which product would maximize Larry's profits. Larry's Beach Hut Product Mix Analysis grand-cola energy drink orange soda 12 oz. Cans 20 oz. Bottles 20 oz. Bottles The beverage stand sells three types of cold drinks: 1. Grand-Cola in 12-oz. cans for $1.60 per can 2. Energy Drink in 20-oz. plastic bottles for $1.75 per bottle 3. Orange Soda in 20-oz. glass bottles for $2.30 per bottle Larry's Beach Hut pays its suppliers the following: 1. $0.10 per 12-oz. can of grand-cola 2. $0.45 per 20-oz. bottle of energy drink 3. $0.70 per 20-oz. bottle of orange soda Larry's Beach Hut's monthly fixed expenses include the following: Hut rental.... $ 360 Refrigerator rental ..... 65 1,800 Larry's salary $ 2,225 Total fixed expenses 1. What is the constraining factor at Larry's Beach Hut? What should Larry stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? 2. To provide variety to customers, suppose Larry refuses to devote more than 75 linear feet and no less than 20 linear feet to any individual product. Under this condition, how many linear feet of each drink should be stocked? How many units of each product will be available for sale each day? 3. Assuming the product mix calculated in Requirement 2, what contribution margin will be generated from refrigerated drinks each day? at is ma Contribution margin for equivalent number of direct labor hours Contribution margin per linear foot of shelf space Contribution margin per unit Fixed costs per unit Sales price per unit Units per linear foot of shelf space Variable cost per unit rry stock ink with profits. ener 20 oz