Come Clean 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 Git 337 and its Sparkle silver polish. Grit 337 is a coarse cleaning powder with many industrial uses. It costs $160 a pound to make, and it has a selling price of $3, 00 a pound A small portion of the annual production of Git 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 poish sellis for $4,00 per jar. This further processing requires one-fourth pound of Grit 337 per jac of silver polish. The additional direct variable costs involved in the processing of a jar of silver polish are. Overhead costs associated with processing the siver polish are: 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 can produce up to 5,000 jars of polish per month. its resale value is negigible and it does not wear out through use. Advertising costs for the silver polish total \$3,500 per month. Variable selling costs associated with the silver polish are 5% of sales. Due to a recent dectine in the demand for sliver polish, the company is wondering whether its continued production is advisable. The sales manager feels that it would be more profitable to sell all of the Grit 337 as a cleaning powder. Required: 1. How much inctemental reverue does the company eam per jar of polish by further processing Git 337 father than selling it as a cleaning powder? (Round your answer to 2 decimal ploces.) 2. How much incremental contibution margin does the company earn per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal ploces.) 3. How manyjars of silver polish must be sold each month to exactly offset the avoidable fixed costs incurred to produce and sell the polisi? (Round your intermediate colculotions to 2 decimal places.) 4. If the company sells 7,100 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling it as a cleaning powdet? (Enter any "disadvantages" as a negative value. Round your intermediate calculations to 2 decimal ploces.) 5. If the company seils 10,300 jars of polish, what is the financial odvantage (disadvantage) of choosing to further process Git 337 rather than selling is as a cleaning powder? (Enter any "disodvantoges" as a negative value. Round your intermediate calculotions to 2 decimol ploces.) Overhead costs associated with processing the silver polish are: The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is specialpurpose equipment acquired specifically to produce the silver polish. It can produce up to 5,000 jars of polish per month. Its resale value is negligible and it does not wear out through use Advertising costs for the siliver polish total $3,500 per month. Variable selling costs associated with the silver polish are 5% of sales. Due to a recent decine 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 sell all of the Grit 337 as a cleaning powder. Required: 1. How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than selling it as a cleaning powder? (Round your answer to 2 decimal places.) 2. How much incremental contribution margin does the company earn per jar of polish by further processing Grit 337 rather than seling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal places.) 3. How many jars of silver polish must be soid each month to exactly offset the avoidable fixed costs incutred to produce and sell the polish? (Round your intermediate calculotions to 2 decimal places.) 4. If the company sells 7,100 jars of polish. What is the financlal advantage (disadvantage) of choosing to further process Grit 337 rather than selling it as a cleaning powder? (Enter any "disadvantages" os a negotive value. Round your intermediote calculations to 2 decimal places.) 5. If the comparly sells 10,300 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling is as a cleaning powder? (Enter any "disadvantages" as a negative volue. Round your intermediate calculations to 2 decimal places.)
