Please help with the ones that are incorrect thanks!! In response to a growing a

Question

Please help with the ones that are incorrect thanks!!

In response to a growing awareness of gluten allergies, Oriole 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 Sales price Variable cost Fixed cost Total cost Gross profit Pounds of flour Sugar $111.60 $63 16 79.00 $32.60 Raisin $129.45 $87 21 108.00 $21.45 1.5 $131.80 $82 19 101.00 $30.80

Explanation / Answer

When there are no raw material constraints, chocolate chip provides the highest contribution margin per batch.

Therefore, chocolate chip will maximize the company's contribution margin.

When Oriole will be able to purchase only 40,050 pounds of floor, contribution margin per pound of floor should be computed first in the following manner:

Contribution margin per pound of floor is highest for Oatmeal Raisin. Therefore, all the floor available to Oriole should be used in baking Oatmeal Raisin.

Number of batches of cookies to bebaked by Oriole are as follows:

Chocolate chip = 0

Sugar = 0

Oatmeal raisin = 40,050/1.5 = 26,700

Company's contribution margin = 26,700 x ($129.45 - $87) = $1,133,415

C Chip S O R Sales price 131.8 111.6 129.45 Less: Variable costs 82 63 87 Contribution margin 49.8 48.6 42.45 Divide: Pounds of floor 2 2 1.5 Contribution margin per pound of floor 24.9 24.3 28.3

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