Please help, I am stuck with this problem. Each morning, Max White stocks the...

70.2K

Verified Solution

Question

Accounting

imageimageimageimage

Please help, I am stuck with this problem.

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 Requirement 2. Suppose Max's Beach Hut refuses to devote more than 75 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each product will be available for sale each day? (Abbreviation used: CM = contribution margin.) Max's Beach Hut should stock its shelves as follows: I First stock Next stock linear feet with the product that has the linear feet with the product that has the CM per linear foot - CM per linear foot - How many units of each product will be available for sale each day based on the product mixed determined in the preceding step? (For entries with a $0 balance, make sure to enter "0" in the appropriate cell.) Units for sale Grand-Cola in 12 oz. cans: Grand-Cola in 20 oz. bottles: Pretty Pop in 20 oz. bottles: cans bottles bottles A Data Table Max's Beach Hut sells three types of cold drinks: 1. Grand-Cola in 12-oz. cans for $1.45 per can 2. Grand-Cola in 20-oz. bottles for $1.95 per bottle 3. Pretty Pop in 20-oz. bottles for $2.35 per bottle Max's Beach Hut pays its suppliers: 1. $0.35 per 12-oz. can of Grand - Cola 2. $0.60 per 20-oz. bottle of Grand - Cola 3. $0.80 per 20-oz. bottle of Pretty Pop Max's Beach Hut's monthly fixed costs include: 390 Hut rental Refrigerator rental 75 1,550 Max's salary 2,015 Total fixed costs Requirements 1. What is Max's Beach Hut's constraining factor? What should Max stock to maximize profits? 2. Suppose Max's Beach Hut refuses to devote more than 75 linear feet to any individual product. Under this condition, how many linear feet of each drink should Max's stock? How many units of each product will be available for sale each day

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students