Req. 1 - 3

The Beach Comber is a take-out food store at a popular beach resort. Sara Miller, owner of the Beach Comber, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: (Click to view the data.) 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. Read the requirements. Data Table . Natural Punch Orange Juice 27.10 $ 39.50 21.50 $ 29.80 $ Cola Lemonade 19.10 $ 20.25 $ 14.40 $ 15.90 $ Selling price per case Variable cost per case Cases sold per foot of shelf space per day 10 24 25 22 Print Done Requirement 1. Calculate the contribution margin per case of each type of drink. Cola Lemonade Natural Punch Orange Juice 27.10 $ 39.50 21.50 29.80 Selling price per case $ 19.10 $ 14.40 20.25 $ 15.90 Variable cost per case Contribution margin per case Requirement 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 O A. This recommendation does not make sense. It fails to recognize that the company has limited shelf space and therefore wants to maximize the contribution margin per foot of shelf space. OB. This recommendation does not make sense. The company should allocate equal shelf space to each product so the customer has plenty of options. OC. This recommendation makes sense. It will allow the company to maximize their contribution margin. Requirement 3. What shelf-space allocation for the four drinks would you recommend for the Beach Comber? Show your calculations. Begin by calculating the amount that should be used to determine the allocation. (Round your answers to the nearest cent.) Natural Cola Lemonade Punch Orange Juice Allocate the shelf space to each product and show the effect it will have on the Beach Comber's operations. (Round your answers to the nearest cent.) Total per Foot of Feet of Shelf Space Shelf Space per Day Cola Lemonade Punch Natural Orange Juice Total