Allocating constrained resources - In response to a growing awareness of gluten allergies, Outland 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:

Outland's flour supplier has announced a shortage of gluten-free flour. As a result, Outland will only be able to purchase 50,000 pounds of flour. How many batches of each type of cookie should the company bake? What will the company's contribution margin be?

Sales price Variable cost Fixed cost Total cost Gross prot Pounds of our Chocolate Sugar Oatmeal Chip Raisin m M M $81 $86 $78 3 Q E 99 101 98 m g 5% 2.5 2.5 2