Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 14-40 Joint Products; Relevant Costs; Cost-Volume-Profit Analysis (LO 14-4, 14-6) Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most

image text in transcribed
Exercise 14-40 Joint Products; Relevant Costs; Cost-Volume-Profit Analysis (LO 14-4, 14-6) Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are processed independently, a few are related. Grit 337 , a coarse cleaning powder with many industrial uses, costs $2.00 a pound to make and selis for $3.20 a pound. A small portion of the annual production of this product is retained for further processing in the Mixing Department, where it is combined with several other ingredients to form a paste, which is marketed as a silver polish selling for $4,40 per jar. This further processing requires 1/4 pound of Grit 337 per jar. Costs of other ingredients, labor, and variable overhead associated with this further processing amount to $2.30 per jar. Variable selling costs are $0.60 per jar. If the decision were made to cease production of the silver polish, $9,500 of Mixing Department fixed costs could be avoided. Zytel has limited production capacity for Grit 337, but unlimited demand for the cleaning powder. Required: Calculate the minimum number of jars of silver polish that would have to be sold to justify further processing of Grit 337 . (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Answer is complete but not entirely correct. Exercise 14-40 Joint Products; Relevant Costs; Cost-Volume-Profit Analysis (LO 14-4, 14-6) Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are processed independently, a few are related. Grit 337 , a coarse cleaning powder with many industrial uses, costs $2.00 a pound to make and selis for $3.20 a pound. A small portion of the annual production of this product is retained for further processing in the Mixing Department, where it is combined with several other ingredients to form a paste, which is marketed as a silver polish selling for $4,40 per jar. This further processing requires 1/4 pound of Grit 337 per jar. Costs of other ingredients, labor, and variable overhead associated with this further processing amount to $2.30 per jar. Variable selling costs are $0.60 per jar. If the decision were made to cease production of the silver polish, $9,500 of Mixing Department fixed costs could be avoided. Zytel has limited production capacity for Grit 337, but unlimited demand for the cleaning powder. Required: Calculate the minimum number of jars of silver polish that would have to be sold to justify further processing of Grit 337 . (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Answer is complete but not entirely correct

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Auditing

Authors: Graham Cosserat

2nd Edition

0470863226, 978-0470863220

Students also viewed these Accounting questions

Question

Identify several examples of ethical investing and SRI.

Answered: 1 week ago