Come-Clean Corporation protuces a variety of cleaning compounds and solutions for both industrial and household use. White 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 $1.20 a pound to make, and it has a selling price of $3.60 a pound. A small portion of the annual production of Git 337 is retained in the factory for further processing. It is combined with severat other ingredients to form a paste that is marketed as $ parkle silver polish. The silver polish sells for $4,00 per jar. This further processing requires one-fourth pound of Grit 337 per jar of silver polish. The additional direct variable costs involved in the processing of a jar of silver poilish are: Overhead costs associated wath processing the silver polish are: The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is speciatpurpose equipment acquired specifically to produce the siver polish. It can produce up to 12.500 jars of polish per month. its fesale 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 siver 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 advisablo. The soles mansger foels 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 places.) 2. How much incremental contribution 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 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.) 4. If the company sells 8,600 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 rather than selling it as a cleaning powder? (Enter any "disadvantages" as a negative value. Round your intermediate calculations to 2 decimal places.) 5. If the company sells 10,700 jars olppolish, 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 value. Round your intermediate calculations to 2 decimal places.)
