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Question 1 Miramichi Industrial Products Co. is a diversied industrial-cleaner processing company. The company's main plant produces two products: a table cleaner and a floor

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Question 1 Miramichi Industrial Products Co. is a diversied 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 31,500 litres of chemical input at a cost of $211,200 into 21,000 litres of oor cleaner and 10,500 litres of table cleaner. The oor cleaner has no market value until it is converted into a polish with the trade name FloorShine. The additional processing costs for this conversion total $253,600. FloorShine sells at $20 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 10,500 litres of another compound (TCP) to the 10,500 litres of table cleaner. This joint process will yield 10,500 litres each of table stain remover and table polish. The additional processing costs for this process are $129,000. Both table products can be sold for $20 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: Production in litres (10,500) 10,500 10,500 Revenue $262,500 $210,000 $210,000 $420,000 Costs: CDG costs 70,400a 52,800 52,800 105,600\" TCP costs 0 64,500 64,500 129,000 Total costs W W W m Weekly gross prot $192,100 $92,700 $92,700 $185,400 a If the table cleaner is not processed further, it is allocated one-third of the $211,200 of CDG cost, which is equal to one-third of the total physical output. b If the table cleaner is processed further, the total physical output is 42,000 litres. Table stain remover and table polish combined account for 50% of the total physical output and are each allocated 25% of the CDG cost. 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 prot assuming the table cleaner is not processed further. Company's total weekly gross prot 4: (2) Calculate the company's total weekly gross prot assuming the table cleaner is processed further. Company's total weekly gross prot $|:] (3) Compare the resulting net incomes and comment on management's decision. Management made the I: decision by choosing to not process table cleaner further. 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, e.g.-15,000 or parenthesis, e.g. (15,000).) Incremental revenues ' ' ' $' $ $ ' Incremental costs ' ' ' ' ' Totals A The table cleaner :3 be processed further

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