on Industrial Products Inc. (TIPI) is a diversified industrial-cleaner processing company. The company Thom duces two products: a table cleaner and a floor cleaner from a common set of chemical inputs (CDG) pro ounces of chemical input are processed at a cost of $210,000 into 600,000 ounces of floor cleaner a cleaner. The floor cleaner has no market value until it is converted into a polish with the trade nam nd 300,000 ounces processing costs for this conversion amount to $240,000 of table e FloorShine. The additional FloorShine sells at $20 per 30-ounce bottle. The table cle cleaner can be converted into two other products by adding 300,000 ounces of an of table cleaner. This joint process will yield 300,000 ounces each of table stain remover (TSR) and table polish (TP). The aner can be sold for $17 per 25-ounce bottle. However, the table other compound (TCP) to the 300,000 ounces tional processing costs for this process amounts to $100,000. Both table products can be sold for $14 per $25-ounce bottie The company decided not to process the table cleaner into TSR and TP based on the following analyss Process Further Table Table Stain Table CleanerRemover (TSR) Polish (TP) Total Production in ounces Revenue Costs: 300,000 $204,000 300,000 $168,000 300,000 $168,000 336000 70000* 0 70,000 $134,000 52,500 50,000 102,500 $65,500 52,500 50,000 102,500 $65,500 105,000* 100,000 205,000 $131,000 CDG costs TCP costs Total costs Weekly gross profit If table cleaner is not processed further, it is allocated 1/3 of the $210,000 of CDG cost, which is equal to 1/3 of the total physical output. " If table cleaner is processed further, total physical output is 1,200,000 ounces. TSR and TP combined account for 50% of the total physical output and are each allocated 25% of the CDG cost. Instructions Determine if management made the correct decision to not process the table cleaner further by doing the following. (1) Calculate the company's total weekly gross profit assuming the table cleaner is not processed further (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further (3) Compare the resulting net incomes and comment on management's decision (a) (b) Compare the resulting NOTE: Enter a number in cell net incomes and comment on management's decision s requesting a value; enter either a number or a formula in cells with a"?" Determine if m (1) Calculate the company's total weekly gross profit assuming the ta (a) anagement made the correct decision to not process the table cleaner further by doing the following ble cleaner is not processed further Table Cleaner Not Processed Further Sales FloorShine Table cleaner Total Revenue Costs CDG Additional costs of FloorShine Value Value Total costs Gross profit Determine if management made the correct decision to not process the table cleaner further by doing the following (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further (a) Table Cleaner Processed Further Sales: FloorShine Table Stain Remover Table Polish Value Value Value Total Revenue Costs: CDG Additional costs of FloorShine Value Value TCP Value Total costs Gross profit (a) Determine if management made the correct decision to not process the table cleaner further by doing (3) Compare the resulting net incomes and comment on management's decision. Response (b) Compare the resulting net incomes and comment on management's decision. Net Income Don't Process Table Cleaner Further Value Value Process Table Cleaner Further Value Value Increase Decrease) Value Value Incremental revenue Incremental costs Total Response After you have completed P7-3A, consider the following additional question Assume that the selling price of the two table products after further processing changed for each 25-ounce bottle and the cost of TCP compound to further How do these changes impact the decision to process or not process further? to $13 process changed to $120,000