Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Old Beach is a small restaurant. Susan Pratt, owner of the restaurant, is deciding how much refrigerator space to devote to four different drinks.
The Old Beach is a small restaurant. Susan Pratt, owner of the restaurant, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: Flavoured Orange milk juice $25.00 $39.20- $20.70- $30.20 Coca- Sprite- Cola- Lemon Selling price per case- $20.00- $22.00. Variable cost per $14.20- $16.5 case- Cases sold per meter 25- 24 of shelf space per day. 4 + 5 + Susan has a maximum front-shelf space of 14 meters to devote to the four drinks. She wants a minimum of 1meter and a maximum of 6 meters of front- shelf space for each drink. Required + a. Calculate the contribution margin per case of each type of drink. [2 marks] + b. A co-worker of Susan's recommends that she maximise the shelf space devoted to those drinks with the highest contribution margin per case. Evaluate this recommendation. [3 marks] + c. What shelf-space allocation for the four drinks would you recommend for the Old Beach restaurant? Show your calculations. - [3 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started