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Homey Bricks Company manufactures bricks using clay deposits on the company's property. Raw clays are blended and then extruded into molds to form unfired bricks.

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Homey Bricks Company manufactures bricks using clay deposits on the company's property. Raw clays are blended and then extruded into molds to form unfired bricks. The unfired bricks are then stacked onto movable metal platforms and rolled into the kiln (an oven for burning bricks) where they are fired until dry. The dried bricks are then packaged and shipped to retail outlets and contractors. The bottleneck in the production process is the kiln, which is available for 2,000 hours per year. Data concerning the company's four main products appear below. Products are sold by pallets. Gross sales per pallet Contribution margin per pallet Annual demand (pallets) Kiln-hours required per pallet Houston Bricks S832 $520 90 8 Tyreke Bricks $1,492 $696 110 8 Griffin Bricks $648 $416 100 4 Ridley Bricks $943 $485 120 5 No fixed costs could be avoided by modifying how much is produced of any product. Required: (1) (ii) Calculate the contribution margin per kiln-hour for each type of products. What is the production plan for the year that would maximise the company's profit? (6 marks) If the kiln could be operated for more than 2,000 hours per year by running it after normal working hours, up to how much per hour should the company be willing to pay in overtime wages, energy costs, and other incremental costs to operate the kiln additional hours? (2 marks) Salespersons are currently paid a commission of 5% of gross sales. Will this motivate the salespersons to make the right choices concerning which products to sell most aggressively? Why or why not? If not, what is your recommendation? Briefly explain. (4 marks) (iii)

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