Exercise 11-28 (Static) Sell-or-Process-Further Decision; Product Mix [LO 11-4, 11-7] Cantel Company produces cleaning compounds for both commerclal and househoid customers, Some of these products are produced as part of a joint manufacturing process. For example, GR37 a coarse cleaning powder meant for commercial sale, costs $1.60 a pound to make and sel's for $200 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form Sipol, which is sold as a silver polish. at $400 per unst. The additional processing requires 1/4 pound of GR37 per unit, additional processing costs amount to $250 per unit of SaPol produced. Variable seling costs for SiPol average $0.30 per unt if production of SilPol were discontinued, $5,600 of costs in the processing. department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37. Required: 1 Caiculate the minimum number of units of SiPol that would have to be sold in order to justify further processing of GR37. 2 Assume that the cost data reported for GR37 are obtained at a level of output equal to 5.000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (foss) under each of the following scenarios: (a) all avaliable capacity is used to produce GR37, but no Silpol; (b) 4.000 units of SiPol are produced, with the balance of capacity devoted to the production arnd sale of GR37; (c) 8,000 units of SiPol are produced, with the balance of capacity devoted to the production and sale of GR37, and (d) 10,000 units of SiPol are produced, with the balance of capacity devoted to the proctuction and sale of GR37. Complete this question by entering your answers in the tabs below. Calculate the minimum number of units of Sipol that would have to be sold in order to justify further processing of GRz. (Round your answer to nearest whole numbnc) Complete this question by entering your answers in the tabs below. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no Silpol; (b) 4,000 units of Silpol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 8,000 units of Silpol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 10,000 units of Silpol are produced, with the balance of capadity devoted to the production and sale of GR37. (Loss amounts should be indicated with a minus sign.)
