Question: Only need help with part C In response to a growing awareness of gluten allergies, Crane Bakery tried using gluten-free flour in its three most

Only need help with part C

In response to a growing awareness of gluten allergies, Crane 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

$119 $111 $116

Variable cost

$60 $65 $60

Fixed cost

18 13 21

Total cost

78 78 81

Gross profit

$41 $33 $35

Pounds of flour

2.5 2.5 2

(a)

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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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(b)

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Assume that, based on typical customer demand, Crane will sell 10,900 batches of chocolate chip cookies, 6,900 batches of sugar cookies, and 8,900 batches of oatmeal raisin cookies. What will the companys contribution margin be?

The companys contribution margin $enter the companys contribution margin in dollars

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(c)

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Cranes flour supplier has announced a shortage of gluten-free flour. As a result, Crane will only be able to purchase 45,050 pounds of flour. How many batches of each type of cookie should the company bake?

Batches

Chocolate Chip

enter a number of batches

Sugar

enter a number of batches

Oatmeal Raisin

enter a number of batches

What will the companys contribution margin be?

The companys contribution margin $enter the companys contribution margin in dollars

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(d)

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

select an option NoYes

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