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Potter Inc. manufactures wizard figurines. All figurines are approximately the same size, but some are plain ceramic whereas others are fancy. Management is considering producing
Potter Inc. manufactures wizard figurines. All figurines are approximately the same size, but some are plain ceramic whereas others are "fancy". Management is considering producing only the fancy figurines because they appear to be substantially more profitable than the ceramic figurines. The company's total production overhead is $5,017,500. Some additional data follow. Ceramic Fancy Revenues $15,000,000 $16,800,000 Direct costs $8,250,000 $8,750,000 Production (units) 1,500,000 350,000 Machine hours 200,000 50,000 Direct labor hours 34,500 153,625 Number of inspections 1,000 6,500 00 Required: Potter Inc. has consistently used machine hours to allocate overhead. Determine the profitability of Ceramic figurines B. Potter Inc. has consistently used machine hours to allocate overhead. Determine the profitability of Fancy figurines
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