Question
In response to a growing awareness of gluten allergies, Sheridan 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, Sheridan 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 | $132 | $127 | $132 | |||||||||
Variable cost | $82 | $82 | $84 | |||||||||
Fixed cost | 18 | 13 | 20 | |||||||||
Total cost | 100 | 95 | 104 | |||||||||
Gross profit | $32 | $32 | $28 | |||||||||
Pounds of flour | 2.5 | 2.5 | 2 |
(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 | $enter a dollar amount rounded to 2 decimal places | |
Sugar | $enter a dollar amount rounded to 2 decimal places | |
Oatmeal Raisin | $enter a dollar amount rounded to 2 decimal places |
What type of cookie would maximize the companys contribution margin?
select a type of cookie SugarChocolate ChipOatmeal Raisin |
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