Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

Trial-and-error solution approach 2

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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1

Lemonade Punch Natural orange juice

1
Trial-and-error solution approach
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Graphical solution approach. Most LP applications in practice use standard software packages that rely on the simplex method to calculate the optimal solution.
Solutions to exercises
10.11 Relevant costs, contribution margin and product emphasis.
(20–25 min)
1

Cola

Lemonade

Punch
Natural
orange
juice
Selling price per case
€108.00
€115.20
€158.40
€230.40 Deduct variable costs per case
81.00 91.20 120.60 181.20 Contribution margin per case
€27.00
€24.00
€37.80
€49.20

Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
2
The argument fails to recognise that shelf space is the constraining factor. There are only 12 metres of front shelf space to be devoted to drinks. Consuelo should aim to get the highest daily contribution margin per metre of front shelf space

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