Q4

Due to the extreme heat this summer, Gelato Supreme, a manufacturer of high quality gelato and icecreams has been experiencing much higher than expected demand. The following additional information is available: a. The company's would like to take advantage of the new deamnd but is unsure how to proceed. The current production mix was proposed by marketing based on the sales revenue. Marketing would like Production to produce all the Chocolates before filling any other demand. b. The direct labour rate of $25.00 per hour is expected to remain unchanged during the coming year. c. Variable overhead costs are $15.00 per direct labour-hour. d. All of the company's non-manufacturing costs are fixed. c. The commanv's can run two levels of overtime: f. The company tries it's best not to have layoffs and have loyal, long-term employees and have been considering implementing a performance management system. For each of the required below, please clearly show all working, format statements, and analysis and label each number. Showing numbers ONLY are not sufficient. Required: 1. Prepare a schedule (table) showing the total direct labour-hours that will be required to produce the units estimated to be sold during the coming year AND how current capacity will be allocated to the variour products to maximize profits? 2. Show the contribution margin analysis comparing the current production mix with your proposed mix and clearly state the difference in Profit. Due to the extreme heat this summer, Gelato Supreme, a manufacturer of high quality gelato and icecreams has been experiencing much higher than expected demand. The following additional information is available: a. The company's would like to take advantage of the new deamnd but is unsure how to proceed. The current production mix was proposed by marketing based on the sales revenue. Marketing would like Production to produce all the Chocolates before filling any other demand. b. The direct labour rate of $25.00 per hour is expected to remain unchanged during the coming year. c. Variable overhead costs are $15.00 per direct labour-hour. d. All of the company's non-manufacturing costs are fixed. c. The commanv's can run two levels of overtime: f. The company tries it's best not to have layoffs and have loyal, long-term employees and have been considering implementing a performance management system. For each of the required below, please clearly show all working, format statements, and analysis and label each number. Showing numbers ONLY are not sufficient. Required: 1. Prepare a schedule (table) showing the total direct labour-hours that will be required to produce the units estimated to be sold during the coming year AND how current capacity will be allocated to the variour products to maximize profits? 2. Show the contribution margin analysis comparing the current production mix with your proposed mix and clearly state the difference in Profit