Question
need assistance In response to a growing awareness of gluten allergies, Wildhorse Bakery tried using gluten-free flour in its three most popular cookies. After several
need assistance
In response to a growing awareness of gluten allergies, Wildhorse 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 | $136 | $131 | $136 | |||||||||
Variable cost | $78 | $77 | $80 | |||||||||
Fixed cost | 18 | 13 | 21 | |||||||||
Total cost | 96 | 90 | 101 | |||||||||
Gross profit | $40 | $41 | $35 | |||||||||
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 company's contribution margin?
B. Assume that, based on typical customer demand, Wildhorse will sell 12,900 batches of chocolate chip cookies, 8,900 batches of sugar cookies, and 10,900 batches of oatmeal raisin cookies. What will the company's contribution margin be?
The company's contribution margin $ |
C.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started