The product with maximum contribution margin per unit of constraint resource will be produced
Chocolate chip cookie = 49/2.5 = $19.6
Sugar = 39/2.5 = $15.6
Oatmeal = 42/2 = 21
Hence, oatmeal cookies will be produced
Chocolate chip = 0
Sugar 0
Oatmeal (50,000/200) = 250 batches
Contribution Margin = 50,000*21 = $1,050,000
Exercise 8-15 In response to a growing awareness of gluten allergies, Outland Bakery tried using gluten-free flour...
In response to a growing awareness of gluten allergies, Ivanhoe 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 $130.00 $110.80 $128.70 Variable cost $81 $63 $87 Fixed cost 19 16 20 Total cost 100.00 79.00 107.00 Gross profit $30.00...