Problem 13-27 (Algo) Sell or Process Further Decisions [LO13-7) Come Clean Corporation produces a variety of cleaning compounds and solutions for both industrial and household use. While most of its products are processed independently a few are related, such as the company's Gred 337 and its Sparile silver polish Grit 337 is a coarse cleaning powder with many industrial uses. It costs $120 a pound to make and has a selling price of $8.00 a pound Asmall portion of the annual production of Gr 337 is retained in the factory for further processing. It is combined with several other ingredients to form a paste that is marketed as Sparkle silver polish. The silver polish sells for $5.00 per jar. This further processing requires one-fourth pound of Grit 337 per jar of silver polish The additional direct variable costs involved in the processing of a jar of silver polish are: Other Ingredients Direct lobor Total direct cost 5.50 1.100 51.90 Overhead costs associated with processing the ver polishare 25% of direct labor cost Variable manufacturing overhead Fixed manufacturing overhead kost per month Production supervisor Depreciation of mixing equipment $ 3,300 $1,600 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 6.000 jars of polish per month its resale value negligible and it does not wear out through use. Advertising costs for the silver polish total $1,700 per month Variable selling costs associated with the silver polish are 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: L How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than selling 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 Selling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal places) 3. How manyjars 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 9.000 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Gt 337