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Miramichi Industrial Products Co. is a diversified industrial-cleaner processing company. The company's main plant produces two products: a table cleaner and a floor cleaner. They

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Miramichi Industrial Products Co. is a diversified industrial-cleaner processing company. The company's main plant produces two products: a table cleaner and a floor cleaner. They are made from a common set of chemical inputs (called CDG). Each week, the company processes 27,000 litres of chemical input at a cost of $207,000 into 18.000 litres of floor cleaner and 9,000 litres of table cleaner. The floor cleaner has no market value until it is converted into a polish with the trade name Floor Shine. The additional processing costs for this conversion total $240,000, Floor Shine sells at $15 per one-litre bottle. The table cleaner can be sold for $25 per one litre bottle. However, the table cleaner can be converted into two other products by adding 9.000 litres of another compound (TCP) to the 9.000 litres of table cleaner. This joint process will yield 9,000 litres each of table stain remover and table polish. The additional processing costs for this process are $120,000. Both table products can be sold for 520 per one-litre bottle. The company decided not to process the table cleaner into table stain remover and table polish based on the following analysis Table Cleaner 19.000) $225.000 Table Stain Remover 9.000 $180.000 Process Further Table Polish Total 9.000 5180.000 $360,000 Production in litres Revenue Costs: F Table Cleaner (9.000) $225,000 Table Stain Remover 9,000 $180,000 Process Further Table Polish Total 9.000 $180.000 $360,000 Production in litres Revenue Costs: CDG costs TCP costs Total costs Weekly gross profit 69.000 0 69.000 $156,000 51.750 60.000 111.750 $68,250 51.750 60,000 111.750 568.250 103.500 120.000 223.500 $136.500 if the table cleaner is not processed further it is allocated one-third of the $207.co/of CDG cost, which is cal to one third of the total physical output birthe table cleaner is processed further, the total physical output 36.000 litres. Table stain remover and table polish combined account for 50% of the total physical output and are each allocated 25% of the CDG.com Do the following to determine whether management made the correct dooslobo grocessing the table cleaner further tissu M Do the following to determine whether management made the correct decision by not processing the table cleaner further. (1) Calculate the company's total weekly gross profit assuming the table cleaner is not processed further. Company's total weekly gross profit $ (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further. Company's total weekly gross profit $ (3) Compare the resulting net incomes and comment on management's decision Management made the decision by choosing to not process tabletleaner further Sed further alfan amount reduces the net Net Income Using incremental analysis, determine whether the table cleaner should be processed further. (If an amount reduces the net income then enter with a negative sign preceding the number, e3-15,000 or parenthesis, es (15,0001) Don't Process Further Process Further Increase (Decrease) Incremental revenues $ Incremental costs Totals $ S S The table cleaner be processed further

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