webportal.cmsener. Home | Consumers ork #11 - E13-9, E13-10, P13-21, P13-27 Saved Help Save & Exit Su Check my we Problem 13-27 (Static) 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 Git 337 and its Sparkle silver polish G 397 is a coarse cleaning powder with many industrial uses it costs $1.60 a pound to make and it has a selling price of $200 a pound. A small portion of the anndal 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 silver polish sells for $1.00 per jam This further acesso 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 12. Other ingredients Director Total direct cont 2.13 Overhead costs associated with processing the silver polish are Variable manufacturing overhead cost 25% of direct labor cost Fixed manufacturing overhead cost (per month Production supervisor $ 3,00 Depreciation of mixing equipment $1,400 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 15,000 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 $4,000 per month. Variable selling costs associated with the silver polish are 75% 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 Check my 4. 6 DO 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 eam 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 Geit 337 rather than selings as a cleaning powder? (Enter any disadvantages as a negative volue, Round your intermediate calculations to 2 decimal places.) 5. If the company sells 11.500 jars of polish, what is the financial advantage (disadvantage of choosing to further process Got 337 rather than seling is as a cleaning powder (Enter any disadvantages" es a negative value. Round your intermediate calculations 10 2 decimal places) 1 Incremental revenue Incontibution magn 3 Number of that must be ancial stage de Der YO 10 000 per month