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Sammamish Brick, Inc., manufactures bricks using clay deposits on the company's property. Raw clays are blended and then extruded into molds to form unfired bricks.
Sammamish Brick, Inc., 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 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 2,300 hours per year. Data concerning the company's four main products appear below. Products are sold by the pallet. Traditional Brick Gross revenue per pallet Contribution margin per pallet Annual demand (pallets) Hours required in the kiln per pallet $769 $480 80 10 Textured Facing $1,352 $ 630 100 10 Cinder Block $608 $388 90 4 Roman Brick $886 $455 140 5 5. The company is considering introducing a new product, glazed Venetian bricks, whose variable cost would be $835 per pallet and that would require 10 hours in the kiln per pallet. What is the minimum acceptable selling price for this new product? Time required (hours) Selling price >
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