Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commercial sale, costs $1.90 a pound to make and sells for $2.00 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form SilPol, which is sold as a silver polish, at $5.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $3.90 per unit of SilPol produced. Variable selling costs for SilPol average $0.50 per unit. If production of SilPol were discontinued, $1,000 of costs in the processing department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37 Required: 1. Calculate the minimum number of units of SilPol that would have to be sold in order to justify further processing of GR37. 2. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating Income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 4,000 units of SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 6,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 8,000 units of SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37 Complete this question by entering your answers in the tabs below. Required 1 Required 2 ssume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 4,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 6,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 8,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37. (Loss amounts should be indicated with a minus sign.) Units of SilPol produced/Sold 4,000 6,000 8,000 Operating income (loss) < Required 1 Required 7 > Show less A Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commercial sale, costs $1.90 a pound to make and sells for $2.00 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form SilPol, which is sold as a silver polish, at $5.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $3.90 per unit of SilPol produced. Variable selling costs for SilPol average $0.50 per unit. If production of SilPol were discontinued, $1,000 of costs in the processing department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37 Required: 1. Calculate the minimum number of units of SilPol that would have to be sold in order to justify further processing of GR37. 2. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating Income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 4,000 units of SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 6,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 8,000 units of SIIPol are produced, with the balance of capacity devoted to the production and sale of GR37 Complete this question by entering your answers in the tabs below. Required 1 Required 2 ssume that the cost data reported for GR37 are obtained at a level of output equal to 5,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 4,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 6,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 8,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37. (Loss amounts should be indicated with a minus sign.) Units of SilPol produced/Sold 4,000 6,000 8,000 Operating income (loss) < Required 1 Required 7 > Show less A
Expert Answer:
Answer rating: 100% (QA)
a All available capacity is used to produce GR37 but no SilPol Operating income 200 190 5000 60000 1... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse...
-
A business has the following transactions: The business is started by receiving cash from an investor in exchange for common stock $20,000 The business purchases supplies on account $500 The...
-
A random variable has a CDF given by (a) Find Pr (X =0) and Pr (X=1). (b) Find Pr(X 1/2). (c) Find Pr(X > 1/2|X >0). 0. x < 0, 1+x Fx(x) = 0SxS1, 2 1, x>1.
-
The Grant Consulting Company has prepared a trial balance on the following partially completed worksheet for the year ended December 31, 2007: Additional information: (a) On January 1, 2007 the...
-
How might low-quality information in ecological statements be improved? In your answer, name two specific institutional mechanisms.
-
Little Switzerland Brewing Company was incorporated on January 28. On February 18, Ellison and Oxley were made directors of the company after they purchased some stock. Then, on September 25, Ellison...
-
Starbucks and Peet's compete to sell coffee. Starbucks' demand function is given as Qx = 44 - 2Px + Py, and Peet's demand function is given as Qy = 44 - 2Py+Px where Px is the price of Starbucks'...
-
Star Bhd is a leader in the marketing of premium heavy equipment in Malaysia and Brunei. The company offers full range of construction equipment and earth moving machinery such as backhoe loaders,...
-
Panama Ltd provides one-day training programs in accounting. It charges $7000 per day. The following events occurred for the company in the month of June 2016. a. Received $30 000 from accounts...
-
Greenfingers Ltd opened a gardening consulting company on 1 August 2016 with each of the two owners contributing $10 000 cash. A one-year bank loan of $40 000 at 12 percent per annum was obtained...
-
Select Harvests Limited is an agricultural company, the core operations of which involve orchard development and, orchard management, as well as supply of almonds to the Australian and overseas...
-
Take the transactions for Hoad Ltd (Problem 3.2 in Chapter 3) and: 1. Prepare journal entries 2. Post to the ledger accounts 3. Prepare a trial balance 4. Prepare closing entries 5. Prepare an income...
-
The accountant for Super Office Supplies Ltd (SOS) is reviewing the year-end unadjusted trial balance and considering the following items of information. For each item, decide if an adjustment to the...
-
In the era of micro financing business in Ghana, most of the players in the industry are failing to adopt proper and best financial practices. Hence this had led the whole industry to attracting bad...
Study smarter with the SolutionInn App