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 Gmt 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 $11.20 a pound. A small portion of the annual production of Gm 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 $6.00 per jar. This further processing requires one-fourth pound of Grt 337 per jar of silver polish. The additional direct variable costs involved in the processing of a jar of silver polish are: Other ingredients Direct labor Total direct cost $0.50 $ 1.94 Overhead costs associated with processing the silver polish are: Variable manufacturing overhead cost 25% of direct labor cost Fixed manufacturing overhead cost (per month) Production supervisor $ 3,40 Depreciation of sixint equipment 5 1.600 The production supervisor has no duties other than to oversee production of the silver polish. The mlading equipment is special- purpose equipment acquired specifically to produce the silver polish. It can produce up to 14.500 jars of polish per month. Its resale value is negligible and it does not wear out through use. Advertising costs for the silver polish total $2,600 per month. Variable selling costs associated with the silver polish are 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 sell all of the Gr 337 as a cleaning powder. Required: 1 How much Incremental revenue does the company earn per jar of polish by further processing Gmt 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 eam per jar of polish by further processing Gm 337 rather than selling 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 sold each month to exactly offset the avoidable fixed costs incurred to produce and sell the polish? (Round your intermediate calculations to 2 decimal places.) Required: 1. How much Incrementat revenue does the company com per jar of ponch by further processing Gert 337 rather than seting it as 2 How much incrementat contribution margin does the company eam per jar of polish by further processing Grit 337 rather than setting it as a clearing powder? (Round your intermediate calculations and final answer to 2 decimal places.) 3 How many yers of silver polish must be sold each month to exactly offset me avoidable foed costs incurred to produce and sell the 4 of the company sets 7,600 jars of polish, what is the financial advantage (disadvantages of choosing to further process Got 337 rather Thonseling is as a cleaning powder? (Enter any disadvantages as a negative value. Round your intermediate calculations to 2 5. If the company ses 11400 jars of polish what is the financial advantage disadvantage of choosing to further process Got 337 rather than selling is as a cleaning powder? (Enter any disadvantages as a negative value. Round your Intermediate calculations to 2 decimal places) 1. creereen per pero 3. Number must be Contato 5. Find
