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 Grit 337 and its Sparkle silver polish. Grit 337 is a coarse cleaning powder with many industrial uses. It costs $1.60 a pound to make; and it has a selling price of $4.00 a pound. 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 one-fourth pound of Git 337 per jar 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 stlver polish are: ect labor cost The production supervisor has no duties other than to oversee production of the silver pollish. The mixing equipment is special. purpose equipment acquired specifically to produce the silter polish. It can produce up to 12,500 Jars of pollish per month. Its resale value is negligible and it does not wear out through use. Advertising costs for the silver polish total $1,800 per month. Varlable selling costs assodiated with the silver polish are 5% of sales; Due to a recent decline in the demand for siliver 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 Git 337 as a cleaning powder. 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 powdet. 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 pleces.) 2. How much incremental contribution margin does the company eam per jar of polish by further processing Git 337 rather than selling it as a cleaning powder? (Round your intermediate calculotions and final answer to 2 decimal places.) 3. How many Jars of siver polish must be sold each month to exactly offset the avoldable fixed costs incurred to produce and sell the polish? (Round your intermediate calculations to 2 decimal places.) 4. Ir the company self 7,800 jass of polish, what is the financial activantage (disadvantage) of choosing to further process Grit 337 rather than seling it as a cleaning powder? (Enter any "disodvantages" as a negotive volue. Round your intermediote calculotions to 2 decimal places.) 5. If twe company sells 11,200 jars of polish, What is the financial advantage (disadvantage) of choosing to further process Grit 337 to 2 decimal places) to 2 decimal plnces.)
