pdates US Support Thompson Industrial Products Inc (TIPI) is a diversified industrial cleaner processing company. The company's Dargan plant produces two products: a table cleaner and a floor cleaner from a common set of chemical inputs (CDG). Each week, 940,500 ounces of chemical input are processed at a cost of $210,300 into 627.000 ounces of floor cleaner and 313,500 ounces 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 amount to $254.800 Floor Shine sells at $20 per 30 ounce bottle. The table cleaner can be sold for $20 per 25-ounce bottle. However, the table cleaner can be converted into two other products by adding 313.500 ounces of another compound (TCP) to the 313.500 ounces of table cleaner. This joint process will yield 313,500 ounces each of table stain remover (TSR) and table polish (TP). The additional processing costs for this process amount to $106,000. Both table products can be sold for $15 per 25-ounce bottle The company decided not to process the table cleaner into TSR and TP based on the following analysis. Table Cleaner 313 500 $250.800 Process Further Table Stain Remover Table (TSR) Polish (TP) Total 313.500 313.500 5188.100 S188.100 $376,200 Production in ounces Revenues Costs: CDG costs TCP costs Total costs Weekly gross profit 70.100 52.575 53,000 105.575 982525 52.575 105.150 52000 106.000 105 575 211.140 $82.525 $165.050 70.100 5180.700 Weekly gross profit $180,700 $82,525 $82,525 $165,050 "If table cleaner is not processed further it is allocated 1/3 of the $210,300 of CDG cost, which is equalto 1/3 of the total physical output. **Iftable cleaner is processed further, total physical output is 1.254,000 ounces. TSR and TP combined account for 50% of the total physical output and are each allocated 25% of the CDG cost. (a) Your answer is correct. 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 assuring the table cleaner is not processed further. Total weekly gross profit $ 200700 (2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further, Total weekly gross pront 223.100 (3) Compare the resulting net incomes and comment on management's decision Management made the wrong decision by choosing to not process table cleaner further. e Textbook and Media Attempts: 2 of 5 used Using incremental analysis, determine if the table cleaner should be processed further. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses es. (451) Don't Process Table Cleaner Further Process Table Cleaner Further Net Income Increase (Decrease) Incremental revenues Incremental costs Totals
