Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a jolnt manulacturing process. For example. GR37, a coarse cleaning powder meant for commercial sale, costs $1.60 a pound to make and sells for $200 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form SiPpol, 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 $250 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 avolded Cantel has, at this point, unlimited demand for, but limited capacity to prodoce, product GR37. Required: 1. Colculate the minimum number of units of SIPPol that would have to be sold in order to justify further processing of GR37. 2. Assume that the cost data reported for 6R37 are obtained at a levet 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) all avallable capacty is used to produce GR37, but no SIPPot; (b) 4,000 units of SiPpol 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 GR31, and (d) 10.000 units of SiPPol are ploduced, with the balance of capacity devoted to the production and sale of GR37 Comptete this question by entering your answers in the tabs below. Assume that the cost data reperted 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 scenarioti (a) alf avalable capacity is used to produce GR37, but no SMPol; (b) 4,000 units of Sapol are produced, with the baiance of capacity devoted to the production and sale of GR37, (c) 8,000 unuts of StPol are produced, with the balance of capacity devoted to the production and sale of GRa7; and (d) 10,000 units of StPpol are produced, with the batance of capocity devoted to the production and sale of GR37. (loss amounts should be indicated with a marius sign) 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) all available capacity is used to produce GR37, but no SilPol; (b) 4,000 units of SilPol 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 SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37. (Loss amounts should be indicated with a minus sign.)
