Bargain Barn is a large discount supermarket. Profits have declined, so the manager has collected data...

 

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Bargain Barn 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 Bargain Barn sells. To facilitate comparisons, the manager has listed average price and cost information for each category in equivalent square-foot packages: Requirements (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 Bargain Barn'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? Requirement (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 Bargain Barn's contribution margin from these four categories? Complete the following table to determine the shelf mix allocation in square footage that will maximize Bargain Barn's contribution margin from these four categories. Contribution margin per unit Allocation in square footage Frozen Ice Cream Juices Dinners Frozen Vegetables Data table FROZEN FROZEN ICE CREAM JUICES DINNERS VEGETABLES Selling price per unit $ 13.30 $ 13.70 $ 25.00 $ 8.00 (square-foot package) Variable costs per unit (square-foot package) Minimum square footage required Maximum square footage allowed 9.40 $ 10.50 $ 21.60 $ 5.60 28 28 28 28 125 125 125 125 The manager wants a maximum of 400 square feet devoted to the four categories in this table. Fixed costs per unit Maximum square footage allowed Minimum square footage required Selling price per unit Units per square foot package Variable cost per unit Bargain Barn 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 Bargain Barn sells. To facilitate comparisons, the manager has listed average price and cost information for each category in equivalent square-foot packages: Requirements (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 Bargain Barn'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? Requirement (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 Bargain Barn's contribution margin from these four categories? Complete the following table to determine the shelf mix allocation in square footage that will maximize Bargain Barn's contribution margin from these four categories. Contribution margin per unit Allocation in square footage Frozen Ice Cream Juices Dinners Frozen Vegetables Data table FROZEN FROZEN ICE CREAM JUICES DINNERS VEGETABLES Selling price per unit $ 13.30 $ 13.70 $ 25.00 $ 8.00 (square-foot package) Variable costs per unit (square-foot package) Minimum square footage required Maximum square footage allowed 9.40 $ 10.50 $ 21.60 $ 5.60 28 28 28 28 125 125 125 125 The manager wants a maximum of 400 square feet devoted to the four categories in this table. Fixed costs per unit Maximum square footage allowed Minimum square footage required Selling price per unit Units per square foot package Variable cost per unit