What type of cookie maximize company contribution margin

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Reference no: EM132515665

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:

 

Chocolate

Chip

Sugar

Oatmeal

Raisin

Sales price

$130

$125

$120

Variable cost

$81

$86

$78

Fixed cost

18

15

20

Total cost

99

101

98

Gross profit

$31

$24

$22

Pounds of flour

2.5

2.5

2

Required

Question 1: Assuming no raw material constraints and unlimited demand for cookies, what type of cookie would maximize the company's contribution margin? Why

Reference no: EM132515665

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