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What will be the total contribution margin per day

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Reference no: EM132540311

Monteagudo-Playa SA is a take-away food store at a popular beach resort. Consuelo Herreros, owner of Monteagudo-Playa, is deciding how much refrigerator space to devote to four different drinks.

Pertinent data on these four drinks are as follows:

                                                           Cola              Lemonade               Punch                orange juice

Selling price per case                               € 110               € 115                  € 160                   € 230

Variable costs per case                               € 80                   € 90                 € 120               € 180

Cases sold per meter of shelf-space per day    20 for coke,   25 for lemonade,   5 for punch,   10 for orange juice

Consuelo has a maximum front shelf-space of 14 meters to devote to the four drinks. She wants a minimum of 1 meter and a maximum of 7 meters of front shelf-space for each drink.

Question 1: According to the shelf space given to each type of drink, what will be the total contribution margin per day?

Option a. $ 625

Option b. $ 4,375

Option c. $ 8,075

Option D. $ 6,751.2

Reference no: EM132540311

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