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Requirements 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? 2. Suppose Max's Beach Hut refuses to devote more than 80 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each

Requirements 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? 2. Suppose Max's Beach Hut refuses to devote more than 80 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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HW 5. Please complete both parts :) 

Each morning, Max Smith stocks the drink case at Max's Beach Hut in Myrtle Beach, South Carolina. The drink case has 120 linear feet of refrigerated drink space. Each linear foot can hold either six 12-ounce cans or three 20-ounce bottles. E (Click the icon to view the information on the cold drinks.) Max's Beach Hut can sell all the drinks stocked in the display case each morning. Data Table Read the requirements. .... Requirement 1. What is Max's Beach Hut's constraining factor?? What should Max stock to maximize profits? Max's Beach Hut sells three types of cold drinks: 1. Licious - Ade in 12-oz. cans for $1.40 per can The constraining factor is linear feet of shelf space 2. Licious - Ade in 20-oz. bottles for $1.90 per bottle 3. Pep - Cola in 20-oz. bottles for $2.20 per bottle What should Max stock to maximize profits? Max's Beach Hut pays its suppliers: Complete the product mix analysis to determine which product would maximize Max's profits. 1. $0.20 per 12-oz. can of Licious - Ade 2. $0.35 per 20-oz. bottle of Licious - Ade Licious-Ade Licious-Ade Pep-Cola 3. $0.55 per 20-oz. bottle of Pep - Cola 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Max's Beach Hut's monthly fixed costs include: Sales price per unit Hut rental $ 355 Variable cost per unit Refrigerator rental 65 Contribution margin per unit Max's salary 1,700 Units per linear foot of shelf space 2,120 Total fixed costs Contribution margin per linear foot of shelf space
Transcribed Image Text:Each morning, Max Smith stocks the drink case at Max's Beach Hut in Myrtle Beach, South Carolina. The drink case has 120 linear feet of refrigerated drink space. Each linear foot can hold either six 12-ounce cans or three 20-ounce bottles. E (Click the icon to view the information on the cold drinks.) Max's Beach Hut can sell all the drinks stocked in the display case each morning. Data Table Read the requirements. .... Requirement 1. What is Max's Beach Hut's constraining factor?? What should Max stock to maximize profits? Max's Beach Hut sells three types of cold drinks: 1. Licious - Ade in 12-oz. cans for $1.40 per can The constraining factor is linear feet of shelf space 2. Licious - Ade in 20-oz. bottles for $1.90 per bottle 3. Pep - Cola in 20-oz. bottles for $2.20 per bottle What should Max stock to maximize profits? Max's Beach Hut pays its suppliers: Complete the product mix analysis to determine which product would maximize Max's profits. 1. $0.20 per 12-oz. can of Licious - Ade 2. $0.35 per 20-oz. bottle of Licious - Ade Licious-Ade Licious-Ade Pep-Cola 3. $0.55 per 20-oz. bottle of Pep - Cola 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Max's Beach Hut's monthly fixed costs include: Sales price per unit Hut rental $ 355 Variable cost per unit Refrigerator rental 65 Contribution margin per unit Max's salary 1,700 Units per linear foot of shelf space 2,120 Total fixed costs Contribution margin per linear foot of shelf space
Requirements 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? 2. Suppose Max's Beach Hut refuses to devote more than 80 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each product will be available for sale each day?
Transcribed Image Text:Requirements 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? 2. Suppose Max's Beach Hut refuses to devote more than 80 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each product will be available for sale each day?
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