Solution 1:
Revenue per Jar of silver polish = $5 per jar
Revenue per 1/4th pound of Grit 337 = $7.20 / 4 = $1.80
Incremental revenue per jar for further processing = $5 - $1.80 = $3.20 per jar
Solution 2:
Computation of Additional contribution Margin- If Grit 377 sold after further processing | |||
Particulars | Grit 377 per 1/4 Pound | Silver Polish per jar | Net Increase/ (decrease) |
Selling price per unit | $1.80 | $5.00 | $3.20 |
Variable Costs: | |||
Making cost of Grit 337 | $0.30 | $0.30 | $0.00 |
Other ingredients | $0.00 | $0.55 | $0.55 |
Direct labour | $0.00 | $1.44 | $1.44 |
Variable Manufacturing Overhead | $0.00 | $0.36 | $0.36 |
Variable Selling Cost | $0.00 | $0.25 | $0.25 |
Total variable costs | $0.30 | $2.90 | $2.60 |
Contribution margin | $1.50 | $2.10 | $0.60 |
Hence incremental contribution per jar for further processing = $0.60 per jar
Solution 3:
Minimum number of jars of silver polish that must be sold each month = Avoidabe fixed cost / incremental contribution margin per jar
= ($3400+$2600) / $0.60 = 10,000 jars
Solution 4:
If company sells 8400 jars of polish then incremental contribution margin of further processing = 8400 * $0.60 = $5,040
Avoidable fixed cost = $3400 + 2600 = $6,000
Financial advantage (disadvantage) of further processing = $5,040 - $6,000 = ($960)
Solution 5:
If company sells 11200 jars of polish then incremental contribution margin of further processing = 11200 * $0.60 = $6,720
Avoidable fixed cost = $6,000
Financial advantage (disadvantage) of further processing = $6,720 - $6,000 = $720
CORRECT the WRONG answers Come-Clean Corporation produces a variety of cleaning compounds and solutions for both...
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 $1.20 a pound to make, and it has a selling price of $760 a pound. A small portion of the annual production of Grit 337 is retained...
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 $1.20 a pound to make, and it has a selling price of $7.20 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.20 a pound to make, and it has a selling price of $7.20 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.60 a pound to make, and it has a selling price of $3.20 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.20 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...
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 $1.20 a pound to make, and it has a selling price of $7.80 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.60 a pound to make, and it has a selling price of $4.20 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.60 a pound to make, and it has a selling price of $7.40 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.20 a pound to make, and it has a selling price of $11.40 a pound. A small portion of the annual production of Grit 337 is retained in...
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 $1.20 a pound to make, and it has a selling price of $3.00 a pound. A small portion of the annual production of Grit 337 is retained in...