TABLE 3.1 Materials for a Batch COST/BATCH BATCH Mix 100 lbs. sand 38 lbs. soda 9 lbs. potassium 3 lbs. borax 14 lbs. lime 2 lbs. flourispar 3 lbs. zinc oxide COST/UNIT $35/ton $110/700 lbs $105/200 lbs. $.50/lb. $5.50/50 lbs. $.47/lb. $1.40/Ib. $1.75 5.97 4.72 1.50 1.54 94 4.20 169 lbs. $20.62 Additional Ingredients 20 grams antimony 40 grams arsenic $.23 $5.20/lb. $6.50/lb. .57 Total $.80 $21.42 Cullet: 31 lbs. TABLE 3.3 Production Times and Weekly Output AVERAGE WEEKLY PRODUCTION FIRSTS SECONDS PRODUCTION TIME HOT TIME COLD TIME 15 min. 3 min. 15 min. 15 min. 15 min. 3 min. 25 min. 5 min. ITEM Patterned glasses Paperweights Wrapped tumblers Vases 1 TABLE 3.4 Per Unit Price List? ITEM Patterned glasses Paperweights Wrapped tumblers Vases PRICE $9.00 $15.00 $8.00 $25.00 EXHIBIT 3.1 Giberson's Glass Sudio AVERAGE MONTHLY OPERATING COSTS Office supplies Hand tools and manufacturing supplies Part-time labor (at $5.00/hour) Professional services Advertising and promotion Contributions Dues and subscriptions Travel and entertainment Insurance Taxes and licenses Repairs and maintenance Rent Utilities and telephone Miscellaneous $25.00 150.00 100.00 50.00 20.00 15.00 35.00 75.00 90.00 45.00 25.00 175.00 60.00 50.00 $915.00 EXHIBIT 3.2 Giberson's Glass Studio ASSETS BALANCE SHEET SEPTEMBER 1, 2002 LIABILITIES AND EQUITY $ 100 Accounts payable Truck loan $ 125 6.000 75 50 200 Total liabilities Owner's equity $6,125 11,375 Cash Inventory: Supplies Raw materials Prepaid insurance Prepaid rent Furnace and ovens Equipment Gas tanks Truck Total 175 5,000 3,000 400 8,500 $17.500 Total $17,500 -- Case Requirements Giberson's Glass Studio - - 1. Determine the direct material costs per product based on the data in Table 3.2. 2. Consider that Mr. Giberson wants to make $25/hr for his time preparing the art pieces. Determine the Direct Labor costs per product based on this labor rate. Use Table 3.3 and other data in case to assist you. 3. Determine the variable and fixed costs in Exhibit 3.1. Remember that Gas for the furnace is not included in Exhibit 3.1. Determine the best way that fixed costs should be allocated to the product lines. Prepare a schedule showing the allocation of fixed costs and your justifi- cation for the allocation. 4. Prepare a product profitability schedule based on the costs structure you determined in items 1-3 above. 5. Based on your analysis, prepare an in depth report to Mr. Giberson with your recommen- dations. Include with your report support for your conclusions