Cleanit Corporation produces a variety of cleaning compounds and solutions for both industrial and household use. While most of its products are processed independently, a few are related, such as the company's Grit 337 and its Sparkle silver polish.

Grit 337 is a coarse cleaning powder with many industrial uses. It costs 1.60 a kilo to make, and it has a selling price of 2.00 a kilo. A small portion of the annual production of Grit 337 is retained in the factory for further processing. It is combined with several other ingredients to form a paste that is marketed as Sparkle silver polish. The silver polish sells for 4.00 per jar. This further processing requires a quarter kilo of Grit 337 per jar of silver polish. The additional direct costs involved in the processing of a jar of silver polish are:

Other ingredients	0.65
Direct labour	1.48
Total direct cost	2.13

Overhead costs associated with the processing of the silver polish are:

Variable manufacturing overhead cost	25% of direct labour cost
Fixed manufacturing overhead cost (per month):
Production supervisor	1,600
Depreciation of mixing equipment	1,400

The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is special-purpose equipment acquired specifically to produce the silver polish. It has only negligible resale value.

Direct labour is a variable cost at Cleanit Corporation.

Advertising costs for the silver polish total 4,000 per month. Variable selling costs associated with the silver polish are 7.5% of sales.

Due to a recent decline in the demand for silver polish, the company is wondering whether its continued production is advisable. The sales manager feels that it would be more profitable to just sell all of the Grit 337 as a cleaning powder.

Required:
1.	What is the incremental contribution margin per jar from further processing of Grit 337 into silver polish? (Do not round intermediate calculations. Round your answers to two decimal places.)
	The incremental contribution margin per jar

2.	What is the minimum number of jars of silver polish that must be sold each month to justify the continued processing of Grit 337 into silver polish?
	The minimum number of jars to be sold

Complete the table. (Do not round intermediate calculations. Round your answers to two decimal places. Enter your calculations for the minimum number of jars to be sold into the second answer column, enter your calculations for the minimum number of jars to be sold minus 1,000 jars into the first answer column and for the minimum number of jars to be sold plus 1,000 jars into the last answer column.)

					Jars of Polish; or Lbs. of Grit 337	Jars of Polish; or Lbs. of Grit 337	Jars of Polish; or Lbs. of Grit 337
	Sales of Silver Polish:
		Sales
		Less variable expenses:
			Production cost of Grit 337
			Further processing and selling costs of the polish
				Total variable expenses
		Contribution margin
		Less avoidable fixed costs:
			Production supervisor
			Advertising
				Total avoidable fixed costs
		Total contribution to common fixed costs and to profits
	Sales of Grit 337:
		Sales
		Less variable expenses:
			Production cost of Grit 337
		Contribution to common fixed costs and to profits