The Wave Crave is a take-out food store at a popular beach resort. Cindy Smith, owner of the Wave Crave, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: E (Click to view the data.) Smith 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 sheif space for each drink. . Read the requirements - X Data table Requirement 1. Calculate the contribution margin per case of each type of drink. Natural Natural Cola Lemonade Punch Orange Juice Cola Lemonade Punch 27.30 $ Orange Juice Selling price per case 19.25 $ 19.50 S 27.30 $ 38.75 Selling price per case 19.25 $ 19.50 $ 38.75 Variable cost per case 14.00 15.60 20.70 29.90 15.60 $ 20.70 $ Variable cost per case 14.00 $ 29.90 Contribution margin per case Cases sold per foot of shelf space per day 8 22 25 23 - X Requirements Print Done 1. Calculate the contribution margin per case of each type of drink. 2. A coworker of Smith'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 Wave Crave? Show your calculations.
The Wave Crave is a take-out food store at a popular beach resort. Cindy Smith, owner of the Wave Crave, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: E (Click to view the data.) Smith 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 sheif space for each drink. . Read the requirements - X Data table Requirement 1. Calculate the contribution margin per case of each type of drink. Natural Natural Cola Lemonade Punch Orange Juice Cola Lemonade Punch 27.30 $ Orange Juice Selling price per case 19.25 $ 19.50 S 27.30 $ 38.75 Selling price per case 19.25 $ 19.50 $ 38.75 Variable cost per case 14.00 15.60 20.70 29.90 15.60 $ 20.70 $ Variable cost per case 14.00 $ 29.90 Contribution margin per case Cases sold per foot of shelf space per day 8 22 25 23 - X Requirements Print Done 1. Calculate the contribution margin per case of each type of drink. 2. A coworker of Smith'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 Wave Crave? Show your calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Wave Crave is a take-out food store at a popular beach resort. Cindy Smith, owner of the Wave Crave, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows:
E (Click to view the data.)
Smith 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
- X
Data table
Requirement 1. Calculate the contribution margin per case of each type of drink.
Natural
Natural
Cola
Lemonade
Punch
Orange Juice
Cola
Lemonade
Punch
Orange Juice
Selling price per case
19.25 $
19.50 $
27.30 $
38.75
Selling price per case
19.25 S
19.50 $
27.30 $
38.75
14.00
15.60
20.70
29.90
Variable cost per case
Variable cost per case
%24
14.00 S
15.60 $
20.70 $
29.90
Contribution margin per case
Cases sold per foot of shelf space per day
22
25
23
Requirements
Print
Done
1. Calculate the contribution margin per case of each type of drink.
2. A coworker of Smith'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 Wave Crave? Show your calculations.
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