Lavender Plantations Pty Ltd advertises weekly specials and makes sure that the shelf space (12 metres) at the entrance to the store showcases the specials. For the current week, its three products are being advertised at special prices. Each product must be allocated shelf space. Candles Soaps Detergent $52 $7 $32 Contribution margin per product (at special price) Minimum shelf space required per product 4 metre 1 metres 4 metres Required How should the shelf space be allocated to the three products to maximise the profits from the weekly specials? In answering this question, make sure you fill in the table below. Candles Soaps Detergent Contribution margin per limiting factor (per meter) $ $ To maximise profit, the 12 metres of available shelf space should be allocated as follows: Candles: meters. Soaps: meters. Detergent: meters. Soft Mats produces exercise mats for use in fitness centres. Production capacity is 52300 mats per year. Due to a chain of fitness centres closing, Soft Mats now has spare capacity of 12600 mats per year. An international hotel chain, Mini Break, has recently contacted Soft Mats to place a one-off order for 20160 mats. Mini Break has recently remodelled a number of its hotels to incorporate fitness centres for guests. Budgeted costs for 52300 mats consist of variable manufacturing costs of $2092000 and fixed manufacturing costs of $2008300. Mats normally sell for $86 each, and Mini Break has offered to pay $66 per mat. Mini Break has also requested that each mat be embossed with its company logo. An embossing machine costing $134000 would therefore need to be purchased by Soft Mats. The machine could not be used for other products. If Soft Mats decides to accept the special order, it will need to fulfill in full the special order and turn away existing orders if the production capacity is exceeded. Required a. From a strictly financial perspective, without considering any qualitative factors, should Soft Mats accept the special order? Net profit/loss obtained if special order is rejected: $ Net profit/loss obtained if special order is accepted: $ Decision: . b. Would you recommend accepting the order if Soft Mats was currently operating at 87 per cent capacity? Net profit/loss obtained if special order is rejected: $ Net profit/loss obtained if special order is accepted: $ Decision