FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Pharoah’s flour supplier has announced a shortage of gluten-free flour. As a result, Pharoah will only be able to purchase 51,800pounds of flour.
How many batches of each type of cookie should the company bake?
How many batches of each type of cookie should the company bake?
What will the company’s contribution margin be?
Expert Solution
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Step 1
Contribution means the difference between the selling price and variable cost. When some input is in short supply , then we need to calculated the contribution per input which is in short supply so that we can utilize the input to product the most profitable product.
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