Giberson's Glass Studio

1. Industry characteristics and Competitive environment

Giberson’s Glass Studio belongs to glassware industry. Because Giberson fashioned handblown items and differentiated his products, so his studio had a great competitive advantage. In addition, handblown glassware need relatively high level skills, to some extent, it limits the numbers of competitors. As a result of that, Giberson’s Glass Studio faced a low competition.

2. Products and the production processes

There were mainly four products: Patterned glasses, Paperweights, Wrapped tumblers and Vases. Labors and machines acted the significant roles in production process. Specifically, Giberson, as the skilled glassblower, he used his own breath to shape the objects and removed vessels from metal punty after vessels were formed. On the other hand, furnace and ovens ran continuously.

3. Costing and pricing of the products

First of all, Direct Materials (DM) was divided into two parts: 80% new raw materials and chemicals and no more than 20% cullet. As shown on the Table 1, the former one was 169 lbs and the latter one was 31 lbs. Because the total batch of glass was unchanged (200-pound/week), so DM was Fixed Cost. Moreover, because working time per week was unchanged. And minimum wages and benefits was $25,000 a year. So Direct Labor (DL) was also summarized as Fixed Cost. Finally, Operating Cost (OP) was incurred every month regardless of whether production occurred, so it was also a Fixed Cost. In conclusion, all of costs of Giberson’s Glass Studio were Fixed Costs. And it should be noticed that gas used cost was one of the biggest cost items. As shown on the Table 4, the per unit price of Patterned glasses, Paperweights, Wrapped tumblers and Vases were $9, $15, $8 and $25 respectively.

4. Issues facing the business

In my opinion, there

...