The Seashore Stand (SS) is a take-out food store at a popular beach resort. Susan Sexton, owner of SS, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows:

Cola	Lemonade	Punch	Natural Orange Juice
Selling Price per case	$16.25	$24.30	$20.50	$38.40
Variable Cost per case	11.10	18.30	16.00	29.60
Cases sold per foot of shelf space per day	25	5	13	14

Sexton has a maximum front shelf space of 12 feet to devote to the four drinks. She wants a minimum of one foot and a maximum of six feet of front shelf space for each drink.

REQUIRED:

1. Calculate the Contribution Margin for each type of drink
2. A coworker of Sexton’s recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Evaluate this recommendation.
3. What shelf space allocation for the four drinks would you recommend for Seashore Stand? Support all calculations and recommendations.