Question

Each morning, Max White stocks the drink case at Max's Beach Hut in Myrtle Beach, South Carolina. The drink case has 110 linear feet of refrigerated drink space. Each linear foot can hold either seven 12-ounce cans or three 20-ounce bottles. (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. Read the requirements Requirement 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? The constraining factor is linear feet of shelf space What should Max stock to maximize profits? Complete the product mix analysis to determine which product would maximize Max's profits. Grand-Cola 12 oz. Cans Grand-Cola 20 oz. Bottles Pretty Pop 20 oz. Bottles 2.35 1.45 1.95 Sales price per unit Variable cost per unit Contribution margin per unit 0.35 Units per linear foot of shelf space Contribution margin per linear foot of shelf space Decision: Stock all 12 oz. cans of Grand-Cola

Please help, I am stuck with this problem.

Answer 1

Requirement 1 Grand-Cola Grand-Cola 12 oz. Cans 20 oz. bottles 20 oz. bottles 1,45 $ Pretty Pop Sales price per unit Variable cost per unit Contribution margin per unit Units per linear foot of shelf space Contribution margin linear foot of shelf space 1.95 S 0.60 $ 1.35 S 2.35 $ 0.35 $ 0.80 $ 1.10 $ 1.55 7.70 $ 4.05 $ $ 4.65 Decision all 12 oz. cans of Grand-Cola Requirement 2 First Stock: 75 lineal feet with the product that has the $7.70 CM per linear foot 12 oz. cans of Grand-Cola Second Stock: 35 lineal feet with the product that has the $4.65 CM per linear foot 20 oz. bottles of Pretty Pop Units for sale 525 cans 0 bottles 105 bottles Grand-Cola in 12 oz. cans Grand-Cola in 20 oz. bottles Pretty Pop in 20 oz. bottles