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Intercontinental Chemical Company, located in Buenos Aires, Argentina, recently received an order for a product it does not normally produce. Since the company has excess
Intercontinental Chemical Company, located in Buenos Aires, Argentina, recently received an order for a product it does not normally produce. Since the company has excess production capacity, management is considering accepting the order. In analyzing the decision, the assistant controller is compiling the relevant costs of producing the order. Production of the special order would require 9,000 kilograms of theolite. Intercontinental does not use theolite for its regular product, but the firm has 9,000 kilograms of the chemical on hand from the days when it used theolite regularly. The theolite could be sold to a chemical wholesaler for 14,500 p. The book value of the theolite is 3.30 p per kilogram. Intercontinental could buy theolite for 3.70 p per kilogram. (p denotes the peso, Argentina's national monetary unit. Many countries use the peso as their unit of currency. On the day this exercise was written, Argentina's peso was worth 0.104 U.S. dollar.) Exercise 14-36 Part 1 Required: 1-a. What is the relevant cost of theolite for the purpose of analyzing the special-order decision? 1-b. The relevant cost of theolite for the purpose of analyzing the special-order decision is an example of: Complete this question by entering your answers in the tabs below. Req 1A Req 1B What is the relevant cost of theolite for the purpose of analyzing the special-order decision? (Enter your answer in pesos.)Required: 1-a. What is the relevant cost of theolite for the purpose of analyzing the special-order decision? 1-b. The relevant cost of theolite for the purpose of analyzing the special-order decision is an example of: + Complete this question by entering your answers in the tabs below. Req 1A Req 1B What is the relevant cost of theolite for the purpose of analyzing the special-order decision? (Enter your answer in pesos.) Relevant costReq 1A Req 1B The relevant cost of theolite for the purpose of analyzing the special-order decision is an example of: The relevant cost of theolite for the purpose of analyzing the special-order decision is an example of:Intercontinental Chemical Company, located in Buenos Aires, Argentina recently received an order for a product it does not normally produce. Since the company has excess production capacity, management is considering accepting the order. In analyzing the decision, the assistant controller is compiling the relevant costs of producing the order. Production of the special order would require 9,000 kilograms of theolite. Intercontinental does not use theolite for its regular product. but the firm has 9,000 kilograms of the chemical on hand from the days when it used theolite regularly. The theolite could be sold to a chemical wholesaler for 14,500 ,0. The book value ofthe theolite is 3.30 p per kilogram. Intercontinental could buy theolite for 3.70 p per kilogram. (p denotes the peso, Argentina's national monetary unit. Many countries use the peso as their unit of currency. On the day this exercise was written. Argentina's peso was worth 0.104 US. dollar.) Exercise 14-36 Part 2 2. Identify the relevance of each of the numbers given in the exercise in making the decision. Sales value (b) Book value (c) Current purchase cost 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 $3.00 a pound to make and sells for $4.20 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 $5.60 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 $0.50 per jar. If the decision were made to cease production of the silver polish, $9,700 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.) Minimum number of jars
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