Question: Answer B for thumbs up In response to a growing awareness of gluten allergies, Sheridan Bakery tried using gluten-free flour in its three most popular


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 Oatmeal Raisin Sugar 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 2.5 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 50 Chocolate Chip 45 Sugar 48 Oatmeal Raisin What type of cookie would maximize the company's contribution margin? Chocolate Chip +A IA LA (b) Assume that, based on typical customer demand, Sheridan will sell 12,500 batches of chocolate chip cookies, 8,500 batches of sugar cookies, and 10,500 batches of oatmeal raisin cookies. What will the company's contribution margin be? The company's contribution margin $
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
