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Dave operates his business out of a small storefront, so he does not have a lot of shelf space for his products. Recently, some additional shelf space became available. Dave is trying to decide which of his products to put in that space. Product 1 has a unit contribution margin of $500 and a contribution margin per square foot of space of $2,000. Product 2 has a unit contribution margin of $600 and a contribution margin per square foot of space of $1,200. Based on this information alone, what product would be best for the additional shelf space?

Respuesta :

Answer:

Product 1 will satisfied the given requirement of shelf space

Explanation:

given data:

product 1

"contribution margin/ft^2 of space" -  $2,000.

product 2

"contribution margin/ft^2 of space" - $1,200.

on the basis of additional shelf space,  contribution margin per square foot of space is a deciding  criteria therefore product 1 has higher contribution margin per square foot

hence,  Product 1 will satisfied the given requirement of space

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