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Each morning. Murry Ivery stocks the drink case at Murry's Beach Hut in Myrtle Beach, South Carolina. Murry's Beach Hut has 120 linear feet of
Each morning. Murry Ivery stocks the drink case at Murry's Beach Hut in Myrtle Beach, South Carolina. Murry's Beach Hut has 120 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 Murry's Beach Hut? What should Murry stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? The constraining factor is Murry's should stock the drink with the contribution margin. 1. What is the constraining factor at Murry's Beach Hut? What should Murry 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 Murry refuses to devote more than 65 linear feet and no less than 10 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? inks w th sel Data table s the te fr is I X The beverage stand sells three types of cold drinks: 1. Just-Cola in 12-oz. cans for $1.40 per can 2. Fizzle Pop in 20-oz. plastic bottles for $1.75 per bottle 3. Orange Soda in 20-oz. glass bottles for $2.30 per bottle Murry's Beach Hut pays its suppliers the following: 1. $0.25 per 12-oz. can of just-cola 2. $0.30 per 20-oz. bottle of fizzle pop 3. $0.65 per 20-oz. bottle of orange soda Murry's Beach Hut's monthly fixed expenses include the following: Hut rental maxim $ 375 Refrigerator rental 65 1,700 Murry's salary $ 2,140 Total fixed expenses
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