Question 2 The Happy Beach is a take-out food store at a popular holiday resort. Frank So, owner of Happy Beach, is deciding how much refrigerator space to devote to four different drinks. Pertinent data on these four drinks are as follows: Cream Soda $ Lemonade Punch $ $ Natural Orange Juice $ 19.10 20.25 27.10 39.50 Selling price per case Variable cost per case Cases sold per meter of shelf space per day 14.40 15.90 21.50 29.80 20 48 50 44 So has a maximum front shelf space of 6 meters to devote to the four drinks. He wants a minimum of 0.5 meter and a maximum of 3 meters of front shelf space for each drink. Required: (17 marks) a. Calculate the contribution margin per case of each type of drink. b. The accountant working for So recommends that he maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with the accountant's recommendation? Explain briefly. c. What shelf-space allocation for the four drinks would you recommend for Happy Beach food store? Show your supporting calculations.

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