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product supervisor 3960

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 siver polish Grit 337 is a coarse cleaning powder with many industrial uses- It costs $4.00 a pound to make, and it has a selling price of $6.80 a pound. A small portion of the annual production of Grit 337 is retained in the factcty for further processing. It is combined with several other ingredients to form a paste that is marketed as Sparkie stver polish. The silver polish sells for $4.00 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: 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 sitver polish. It can produce up to 17,400 jars of polish pet month. Its resile value is neglig ble and it does not wear out through use Advertising costs for the silver polish total $4,943 per month. Veriable selling costs associated with the silver polish are 7.5% of salea 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 mote profitable to sell all of the Grit 337 as a cleaning powder. Required: 1. How much incremental tevenue doos 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 decimol ploces.) 2. How much incremental contribution margin does the company eam per jar of polish by further processing Grit 337 tather than selling it as a cleaning powder? (Round your intermedlate 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 selts 13,800 jars of polish, what is the financial advantage (disadvantago) of choosing to further process Grit 337 rather than selling it as a cleaning powder? (Enter any "disodvantages" as a negative value. Round your intermediate calculations to 2 decimal places.) 5. If the company sells 17,500 jars of polish, what is the financial advantoge (disadvantage) of choosing to further process Grit 337 rather thain 5 elling is as a cleaning powder? (Enter any "disadvantages" as a negative value. Round your intermediate calculations to 2 decimal places.) processing of a jar of silver polish are: Overhead costs associated with processing the silver polish are: The production supervisor has no duties other than to oversee production of the silver polish. The mixing equip purpose equipment acquired specifically to produce the silver polish. It can produce up to 17,400 jars of polish value is negligible and it does not wear out through use. Advertising costs for the silver polish total $4,943 per month. Variable selling costs associated with the silver po Due to a recent decline in the demand for silver polish, the company is wondering whether its continued produc sales manager feels that it would be more profitable to sell all of the Grit 337 as a cleaning powder

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