(a) In response to a growing awareness of gluten allergies, Singletary Cookie Co
ID: 2453361 • Letter: #
Question
(a)
In response to a growing awareness of gluten allergies, Singletary Cookie Company 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 $127.60 $108.80 $129.30 Variable cost $79 $61 $87 Fixed cost 18 13 19 Total cost 97.00 74.00 106.00 Gross profit $30.60 $34.80 $23.30 Pounds of flour 2 2 1.5
Explanation / Answer
Highest contribution margin is $48.6 from Chocolate Chip, Hence Chocolate cookie would maximize the company’s contribution margin
Particulars Chocolate Chip Sugar Oatmeal Raisin Sales Price 127.6 108.8 129.3 Less: Variable Cost -79 -61 -87 Contribution Margin 48.6 47.8 42.3Related Questions
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