Cantel Company produces cleaning compounds for both commercial and housohold customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commerclal sale, costs $2.20 a pound to make and sells for $2.40 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 Silpol, which is sold as a silver polish, at $5.00 per unit. The additional processing requires 1/4 pound of GR37 per unit, additional processing costs amount to $3.40 per unit of SIP pl produced. Varlable selling costs for SliPol average $0.30 per unit. If production of SilPol were discontinued, $3,500 of costs in the processing department would be avoided. Cantel has, at this point, unilmited demand for, but limited capacity to produce, product GR37. Required: 1. Calculate the minimum number of units of SiPol that would have to be sold in order to Justify further processing of GR37. 2. Assume that the cost data reported for GR37 are obtalned at a level of output equal to 5,900 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 avallabie capacity is used to produce GR37, but no SIPOO; (b) 3,000 units of SIP Pol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 5,000 units of SIPPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 7.000 units of SIPPol are produced, with the balance of capocity devoted to the production and sale of GR37. (8) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Calculate the minimum number of units of SIPol that would have to be sold in order to justify further processing of GR37. (Round your answer to nearest whole number.) 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 5,900 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) 3,000 units of Silpol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 5,000 units of SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 7,000 units of SIPpol are produced, with the balance of capacity devoted to the production and sale of GR37. (Loss amounts should be indicated with a minus sign.)
