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 $1.60 a pound to make and sells for $2.00 per pound. A portion of the annual production of GR37 is retained for further processing in a separate deportment where it is combined with several other ingredients to form Silpol, which is sold as a silver polish, at $4.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $2.50 per unit of SilPol produced. Variable selling costs for Silpol average $0.30 per unit. If production of Silpol were discontinued, $5,600 of costs in the processing department would be avoided. Cantel has, at this point, unimited demand for, but limited capacity to produce, product GR37. Required: 1. Caiculate the minimum number of units of SIPol that would have to be sold in order to justify further processing of GR37. 2. Assume thot the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income floss) under each of the following scenarios: (a) all avallabie capacity is used to produce GR37, but no SAPol; (b) 4,000 units of SuPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 8,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 10,000 units of SiPpol are produced, with the balance of capacity devoted to the production and sale of GR37. Complete this question by entering your answers in the tabs below. Calculate the minemum number of units of 5 apol that wouid have to be nold in order to justify further processing of salz. (llound your answer to nearest whole numben) Complete this question by entering your answers in the tabs below. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) al available capacity is used to produce GR37, but no sipol; (b) 4,000 units of smpot are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 8,000 units of SiPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 10,000 units of Stpol are produced, with the talance of capacity devoted to the production and sale of GR37. (LOss amounts should be indicated with a minis sign.)
