Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

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 $ 1,396 $ 658 $ 956
Contribution margin per pallet $ 520 $ 650 $ 420 $ 490
Annual demand (pallets) 115 135 125 175
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.

Traditional Textured Cinder Roman Total
Brick Facing Block Brick
Total hours required in the drying kiln 0

2a.

Calculate the profitability index for the company's four products.
Traditional Textured Cinder Roman
Brick Facing Block Brick

2b. What is the production plan for the year that would maximize the companys profit? (Round answer to the nearest complete pallet (i.e., 12.3 pallets should be entered as 12.)
pallets
pallets
pallets
pallets

3.

What would be the total contribution margin for the production plan you have proposed?

Traditional Textured Cinder Roman
Brick Facing Block Brick Total
$0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Mr Barry Elliott, Jamie Elliott

16th Edition

027377817X, 978-0273778172

More Books

Students also viewed these Accounting questions

Question

Outline five major criticisms of humanistic psychologies.

Answered: 1 week ago

Question

Do teachers across cultures differ in immediacy? Explain.

Answered: 1 week ago