In response to a growing awareness of gluten allergies, Pharoah 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 Oatmeal Raisin Sales price Variable cost Fixed cost Total cost Gross profit Pounds of flour རྩི 2」བྷཡོ」དྷ」ཕི」 Sugar $115 $120 $74 $78 13 21 87 99 $28 $21 2.5 2 (a) 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 $ Sugar $ Oatmeal Raisin What type of cookie would maximize the company's contribution margin?

In response to a growing awareness of gluten allergies, Pharoah 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 Oatmeal Raisin Sales price Variable cost Fixed cost Total cost Gross profit Pounds of flour རྩི 2」བྷཡོ」དྷ」ཕི」 Sugar $115 $120 $74 $78 13 21 87 99 $28 $21 2.5 2 (a) 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 $ Sugar $ Oatmeal Raisin What type of cookie would maximize the company's contribution margin?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sugarplum uses standard costing to produce a particularly popular type of candy. Sugarplum's President, Jack Macon was unhappy after reviewing the income statements for the first 3 years of business. He said, "I was told by our accountants—and in fact, I have memorized—that our breakeven volume is 31,000 units. I was happy that we reached that sales goal in each of our first 2 years. But here's the strange thing: In our first year, we sold 31,000 units and indeed we broke even. Then, in our second year we sold the same volume and had a signficant, positive operating income. I didn't complain, of course. . . but here's the bad part. In our third year, we sold 10% more candy, but our operating income dropped by nearly 90% from what it was in the second year! We didn't change our selling price or cost structure over the past 3 years and have no price, efficiency, or spending variances . . . so what's going on?!" LOADING... (Click the icon to view the absorption…
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