Sammamish Brick, Inc., manufactures bricks using clay deposits on the companys 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 3,125 hours per year. Data concerning the companys four main products appear below. Products are sold by the pallet.

	Traditional Brick	Textured Facing	Cinder Block	Roman Brick
Gross revenue per pallet	$833	$1,417	$664	$976
Contribution margin per pallet	$520	$ 660	$424	$500
Annual demand (pallets)	125	145	135	185
Hours required in the kiln per pallet	10	10	4	5

No fixed costs could be avoided by modifying how much is produced of any product.

Required: 1a. Calculate the total hours required in the kiln to satisfy demand for all products. Total Traditional Brick Textured Facing Cinder Block Roman Brick Armen Total hours required in the drying kiln 1b. Is there sufficient capacity in the kiln to satisfy demand for all products? Yes No 2a. Calculate the profitability index for the company's four products. Traditional Textured Brick Facing Cinder Block Roman Brick 2b. What is the production plan for the year that would maximize the company's profit? (Round answer to the nearest complete pallet (i.e., 12.3 p pallets pallets pallets pallets 3. What would be the total contribution margin for the production plan you have proposed? Traditional Brick Textured Facing Cinder Block Roman Brick Total 4. The kiln could be operated for more than 3,125 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? Maximum amount to operate the kiln per hour 5. The company is considering introducing a new product, glazed Venetian bricks, whose variable cost would be $880 per pallet and that would require 6 hours in the kiln per pallet. What is the minimum acceptable selling price for this new product? Time required (hours) Selling price 6. Salespersons are currently paid a commission of 5% of gross revenues. Will this motivate the salespersons to make the right choices concerning which products to sell most aggressively? O Yes