The 16 ounce can of bug remover cost $1.80 to make and sells for $3.00. 16 ounces of bug remover can be further refined into 4 small tins of chrome polish. The chrome polish sells for $5.00 per tin. The equipment is specific to the chrome polish and has no resale value. The supervisor is specific to the chrome polish product and would be terminated if the polish is no longer made. The company normally allows 40,000 ounces of bug remover to be processed into chrome polish.

A. Would the chrome polish have a financially beneficial or detrimental affect and what would the finances look like. B. What non financial reasons would be included in this decision. C. Explain the specific items that might be in COs overhead and how the 25% of DL$ would have been computed.

*Please include excel formulas used* Thank you!

Variable Production Cost to convert to chrome polish Materials $1.65 per tin Direct Labor $1.20 per tin Variable O/H 25% of DL$ Fixed Production Cost of chrome polish Fixed Supervision $2,500 per month Equipment Depreciation $1,200 per month Selling Cost of chrome polish Advertising $4,000 per month Commissions 8% of revenue Variable Production Cost to convert to chrome polish Materials $1.65 per tin Direct Labor $1.20 per tin Variable O/H 25% of DL$ Fixed Production Cost of chrome polish Fixed Supervision $2,500 per month Equipment Depreciation $1,200 per month Selling Cost of chrome polish Advertising $4,000 per month Commissions 8% of revenue