Reference no: EM132507923

Sea and Sand is a takeout food store at a popular beachside resort. Tommy Tillett, owner of Sea and Sand, is deciding how much refrigerator space to devote to each of four different beverages. Appropriate data on the four beverages follow:

                                                                Limeade             Lemonade                Ginger Ale                         Grape Juice
Sales price per case                          $21.50               $23.00                    $21.50                     $45.10
Variable manufacturing costs per case   12.20               14.20                     12.10                           32.20
Variable selling cost per case               4.00                    4.00                4.00                                  4.00
Cases scnlcl per foot of shelf space            30            28                         5                                     5 per day

Question1 : Sea and Sand has a maximum 14 feet of front shelf space to devote to the four beverages combined. Tommy wants to use a minimum of two feet and a maximum of seven feet of front shelf space for each beverage. The contribution margin per case for Limeade is:

Multiple Choice

a) $6.40.

b) $16.20.

c) $5.50.

d) $9.40.

e) $5.40