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i need only part A answer please solve on page Question 1 Read through the information below and answer the questions that follow. The Aroma
i need only part A answer
please solve on page
Question 1 Read through the information below and answer the questions that follow. The Aroma Counter is located in a kiosk on the concourse of a main line railway station. The manager is deciding how much shelf space to devote to three different perfumes. Sales and costs for the last month are shownbelow: Levon-[hr Passion Musk. Selling price p er unit :E 4.9 .EEIEI Variable co sts per unit 2.44] 3 .34 5 .20 Average units soldper day 25 2D 15 Average units soldpermetre of shelf space per day 5 ID 9 Numb er of days in month 3D Total xed costs 1,000 From the next month, after a reallocation of shelf space, the Aroma Counter will have a maximum front shelf space of 10 metres available for the three perfumes. The manager wants a minimum of one metre and a maximum of six metres shelf space for each perfume. e. Whatunderlying assumptions of the analysis you have used might act as limitations on reaching the 'best' decision for the firm? What might the Aroma Counter do to understand and minimise these limitations? (6 marks)a W contribution margin per unit for each perfume and the total revenue, total contribution and total prot for the last month. {8 marks} b. It is assumedthat all the unit sales and cost information above, and the mix of products and sales, will remain the same for the current month. (I D D i.Based onthe proportion ofproducts sold, what is the average contribution per unit for all three perfumes? {4 marks} ii.How many of each perfume needs to be sold in this month to reach breakeven? {F marks} A coworker incorrectly suggests that the pro t will be maximised if the maximum shelf space is devotedto those perfumes with the highest selling price per unit. Using your knowledge of marginal co sting, explain preciselyhow the maximum shelf space available should be used to maximise protability. [4 marks} d. D D i.Whatshelf space allocation forthe three perfumes would you recommend for the Aroma Counter? Show all workings. {6 marks} ii.How much prot will the Aro ma Counter earn in this month fromyour plan? {8 marks}Step by Step Solution
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