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URGENT HELP ASAP!!! Come-Clean Corporation produces a variety of cleaning compounds and solutions for both industrial and household use. While most. of its products are
URGENT HELP ASAP!!!
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 Grit 337 and its Sparkle silver polish. Grit 337 is a coarse cleaning powder with many industrial uses. It costs $60 a pound to make, and it has a selling price of $1 tio a pound. A small portion of the annual production of Grit 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 siver polish sells for $6,00 per jar. This further processing requires one-fourth pound of Git 337 per jar of siver polish. The additional direct vatiable costs involved in the processing of a jar of sibver polish are: Overhead costs associated with processing the silver possh are: The production supervisor has no duties other than to oversee production of the silver poliah. The mixing equipment in mecie value is negiligible and it does not weor out through use. Advertising costs for the siver polish total $1,900 per month Vaniable selling costs associated with the silver polsh are 58 of sbes Due to a recent decline in the demand for sliver polish, the company is wondening whecher its contioued produtbon is addabisbin. The Required: 1. How much incremental revenue does the company earn per jor of poish by further processing Gen 33? rather than seting ik wa Required: The production supervisor has no duties other than to oversee production of the silver polish. The mixing equipment is specialpurpose equipment acquired specifically to produce the silver polish. It can produce up to 16,000 jars of polish per month. Its resale value is negligible and it does not wear out through use. Advertising costs for the silver polish total $1,900 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: 1. How much incremental revenue does the company earn per jar of polish by further processing Grit 337 rather than selling it as a deaning 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 tather than selling it as a cleaning powder? (Round your intermediate calculations and final answer to 2 decimal places.) 3. How many jars 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 10,000 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 . rather than selling it as a cleaning powder? (Enter any "disadvantages" as a negative value. Round your intermediate calculations 5. If the company sells 12,500 jars of polish, what is the financial advantage (disadvantage) of choosing to further process Grit 337 to 2 decimal places.) rather than selling is as a cleaning powder? (Enter any "disadvantages" as a negative value. Round your intermediate calculations Step by Step Solution
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