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In response to a growing awareness of gluten allergies, Sandhill 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, Sandhill 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 Sugar Oatmeal Raisin
Sales price $130 $125 $124
Variable cost $75 $80 $78
Fixed cost 18 13 19
Total cost 93 93 97
Gross profit $37 $32 $27
Pounds of flour 2.5 2.5 2

Sandhill's flour supplier has announced a shortage of gluten-fee flour. As a results, Sandhill will only be able to purchase 48,650 lbs of flour.

a) How many batches of each type of cookie should the company make?

b) What will the company's contribution margin be?

c) If Sandhill uses gluten-free flour in other products, will the allocation you recommend in art (a) change?

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