Aunt Connie's Cookies Contribution Margin and Break-Even the East and the Midwest. Aunt Connie's Cookies was founded in 1986 after a friend of Aunt Connie's urged her to bring her business and baking skills to the public. Aunt Connie's brand has grown successfully into producing lemon curd and peppermint biscuits. Maria Villanueva is the current CEO of this family-owned company. Maria was considering a large biscuit manufacturing order, acquisitions of competitors, and the struggle to meet demand for biscuits and operate as a profitable entity. Maria has to make a decision: 1. Create or buy2. Sell ​​or process further3. Store or replace equipment4. Eliminate an unprofitable business segment5. Allocate limited resourcesThe concept of contribution is important for the decision to be made. Real Mint provides the largest total contribution margin while Lemon Crème provides the largest unit contribution margin. In order to accept the order, one or both biscuit productions will have to be reduced so that energy is used to fulfill the bulk order. The main idea here is to maximize operating profits because it is better to produce a larger quantity of the product that provides the largest unit contribution margin. By keeping Lemon Crème Cookies operating at the same level, no unnecessary operating profits would be lost, and the increased order for Real Mint provides a larger amount of revenue than it would have during a normal month of production. If the bulk order had been for the Lemon Crème cookie it may have been more difficult to achieve and the end result is just as desirable. The Real Mint...... middle of paper ...... The three key learning points identified are breakeven, variable costs, and fixed costs will be important in the decision making process because Mr. Shultz needs to know how many items must sell before you can see profits from each store. Variable costing is important because it impacts profitability and details management strategies to increase profits. Finally, fixed costs are important because they must be paid regardless of sales volumes. Fixed costs include, but are not limited to, overhead expenses (rent, insurance, and the like), but may include direct costs such as payroll. The overall importance of breakeven, variable costs, and fixed costs are equally important to any business decision making process.ReferenceDatamonitor. (January 2005). Starbucks Corporation. Retrieved September 22, 2006, from http://www.investor.reuters.com from University of Phoenix Library.