Natural Orange Juice Cola Lemonade Punch Selling price per case $19.10 $20.25 $27.10 $39.50 Variable cost per case $15.90 $14.40 $21.50 $29.80 Cases sold per foot of shelf space per day 10 24 25 22 Miller has a maximum front shelf space of 12 feet to devote to the four drinks. She wants a minimum of 1 foot and a maximum of 6 feet of front shelf space for each drink. 1. Calculate the contribution margin per case of each type of drink. 2. A coworker of Miller's recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with this recommendation? Explain briefly. 3. What shelf-space allocation for the four drinks would you recommend for the Beach Comber? Show your calculations. Required

Natural Orange Juice Cola Lemonade Punch Selling price per case $19.10 $20.25 $27.10 $39.50 Variable cost per case $15.90 $14.40 $21.50 $29.80 Cases sold per foot of shelf space per day 10 24 25 22 Miller has a maximum front shelf space of 12 feet to devote to the four drinks. She wants a minimum of 1 foot and a maximum of 6 feet of front shelf space for each drink. 1. Calculate the contribution margin per case of each type of drink. 2. A coworker of Miller's recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with this recommendation? Explain briefly. 3. What shelf-space allocation for the four drinks would you recommend for the Beach Comber? Show your calculations. Required

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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