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In response to a growing awareness of gluten allergies, Blossom Bakery tried using gluten-free flour in its three most popular cookies. After several attempts and
In response to a growing awareness of gluten allergies, Blossom Bakery tried using gluten-free flour in its three most popular cookies. After several attempts and a lot of inedible cookies, the company perfected new recipes that yield delicious gluten-free cookies. The costs of producing a batch of 100 cookies are as follows: Chocolate Chip Oatmeal Sugar Raisin Sales price $130 $120 $130 Variable cost Fixed cost Total cost Gross profit 94 $75 19 $77 16 93 $36 $27 Pounds of flour 2.5 2.5 (a) Assuming no raw material constraints and unlimited demand for cookies, calculate contribution margin per batch for Chocolate Chip, Sugar, Oatmeal Raisin cookies. (Round answers to 2 decimal places, e.g. 52.75.) Cookies Contribution Margin $ Chocolate Chip $ Sugar $ Oatmeal Raisin What type of cookie would maximize the company's contribution margin? eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) Assume that, based on typical customer demand, Blossom will sell 11,900 batches of chocolate chip cookies, 7,900 batches of sugar cookies, and 9,900 batches of oatmeal raisin cookies. What will the company's contribution margin be? The company's contribution margin eTextbook and Media Save for Later $ Attempts: 0 of 3 used Submit Answer (c). Blossom's flour supplier has announced a shortage of gluten-free flour. As a result, Blossom will only be able to purchase 49,550 pounds of flour. How many batches of each type of cookie should the company bake? Chocolate Chip Sugar Oatmeal Raisin Batches What will the company's contribution margin be? The company's contribution margin eTextbook and Media Save for Later $ Attempts: 0 of 3 used Submit Answer (d) If Blossom uses gluten-free flour in other products, will the allocation you recommend in part (c) change? eTextbook and Media Save for Later Attempts: 0 of 3 used Submit
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