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Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For

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Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commercial sale, costs $2.30 a pound to make and sells for $2.40 per pound. A poition of the annual production of GR37 is retained for further ptocessing in a separate department where it is combined with several other ingredients to form Silpol, which is sold as a silver polish, at $4.00 pet unit. The additional processing requires 1/4 pound of GR37 pet unit; additional processing costs amount to $2.80 per unit of SilPol produced. Variable selling cosis for SilPol average $0.30 per unit. If production of SiIPol were discontinued, $3,000 of cosis in the processing department would be avoided. Cantel has, at this point, untimited demand for, but limited capacity to produce, product GR37. GR37, Required: 1. Cakculate the minimum number of units of SilPol that woukd have to be sokl in ordet to justify fuither processing of GR37. 2. Assume that the cost data reported for GR37 are oblained at a level of oulput equal to 5.300 pounds, which is the maximum that the company can produce at this lime. What is the expected operating income (loss) under each of the following scenatios (a) all available capadty is used to produce GR37, but no SilPot (b) 7,500 units of SilPol are produced, with the balance of capadty devoted to the pioduction and sale of GR37; (c) 10,000 units of SilPol are produced, with the balance of capadity devoted to the production and sale of GR37; and (d) 12.000 units of SilPol are pioduced, with the balance of capadity devoled to the produclion and sale of GR37

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