Question
Mega Mart is a large discount supermarket. Profits have declined, so the manager has collected data on revenues and costs for different food categories. The
Mega Mart is a large discount supermarket. Profits have declined, so the manager has collected data on revenues and costs for different food categories. The following data pertain to some of the frozen foods that Mega Mart sells. To facilitate comparisons, the manager has listed average price and cost information for each category in equivalent square-foot packages: E (Click the icon to view the data.)
Ice creamjuicesfrozen dinnerfrozen vegetables
Selling price per unit 12.5012.7024.709.60
(Square-foot package)
Variable costs per unit8.809.7020.607.80
(Square-foot package)
Minimum square footage required20202020
Maximum square footage allowed170170170170
Required:
(a) Given the manager's constraints, and assuming that the store can sell whatever is displayed on the shelves, what shelf mix (i.e., what number of square feet for each category in the table) will maximize Mega Mart's contribution margin from these four categories?
(b) What other factors might the manager consider in deciding on the amount of shelf space per category?
Ice creamjuicesfrozen dinnerfrozen vegetables
Selling price per unit____________________________
Variable cost per unit ____________________________
Contribution margin per unit ____________________________
Allocation in square footage ____________________________
Please Fill the table and explain to me how you got the value of Allocation in square footage. thanks
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