Island Potteries (IP) make various clay and ceramic product in its St. Thomas Facilities. IP's...
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Island Potteries (IP) make various clay and ceramic product in its St. Thomas Facilities. IP's three most popular products are, Vases, Dinner Plates and Plant pots. IP currently has the following resources for the current year, 14,000 pounds (lbs) of material and 1,750 labour hours available for production. Production and sales details relating to the signature Products are shown below: Vases Dinner Plates Plant Pots Selling price per unit $84.00 $30.00 $225.00 Direct material (Clay) 2.1 0.6 3.25 @$20 per Pound Direct labor@ $40 per 0.25 0.15 1.00 hour Variable overhead @ 100% of direct labor cost Furnace hours required 1.5 hrs .5 hrs 5 hrs Sales demand units 1,600 2,400 1,100 (annual) Budgeted other fixed manufacturing overheads and selling and admin cost total $ 115,200 Required. Complete the table below to indicate whether GPL has sufficient production capacity to satisfy sales demand for the coming year by providing the information for the optimal production plan for GPL for the current year and the total profit expected. Vases Dinner Plates Plant Pots Total Contribution Margin per s $ unit Contribution Margin per $ Limiting Factor Optimal Production in units Expected Net Income
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