Get the Homework 100 Hele Seve Exit Sun Problem 13-27 (Algo) Sell or Process Further Decisions (LO13-7] 12 06 points Come Clean Corporation produces a variety of cleaning compounds and solutions for bom industrial and household use. While most of its products are processed independently a few are related, such as the company's Grt 337 and its Sparkle siver polish Grit 337 is a coarse cleaning powder with many industrial uses. It costs $120 a pound to make and it has a selling price of $650 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 Spare silver polish. The siver polish sets for $5.00 per This further processing requires one fourth pound of Grit 337 per jar of silver pols. The additional direct variable costs involved in the processing of a jar of silver polshare Other ingredients $ 0.55 Direct labor Total direct cost 52.03 wool Herences Overhead costs associated with processing the silver polish are: Variable manufacturing overhead cost Fixed manufacturing overhead cost per month) 25% of direct labor cost Production supervisor $ 3,00 Depreciation of mixing equipment $1,500 The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is special purpose equipment acquired specifically to produce the silver polish. It can produce up to 5.500 jars of poish per month. Its resale value is negligible and it does not wear out through use Advertising costs for the silver polish total $4,000 per month Variable selling costs associated with the silver polish ate 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 Grit 337 as a cleaning powder Required: 1. How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than seling 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 12 0.0 Dot Sained The production supervisor has no duties other than to oversee production of the silver polish The mixing equipment is special purpose equipment acquired specifically to produce the silver polish. It can produce up to 5,500 jars of both per months value is negligible and it does not wear out through use Advertising costs for the silver polish total $4.000 per month Variable selling costs associated with the silver polish are of sales 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 at of the Grit 337 as a cleaning powder Required: 1. How much incremental revenue does the company earn per jar of polish by further processing Get 337 rather than saling it as cleaning powder? (Round your answer to 2 decimal places.) 2. How much incremental contribution margin does the company cam per jar of polish by further processing Grit 337 ratner than Selling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal places) 3. How many jors 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 8,900 jars of polish, 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.) 5. If the company sells 10,600 jars of polish, 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.) References per per a 1. Incremental revenue 2 Incremental contribution margin 3. Number of jars that must be sold 4. Financial advantage (disadvantage) 5. Financial advantage (disadvantage)