Q Intercontinental's special order requires 1,900 kilograms of genatope, a solid chemical regularly used in the company's products. The...

 

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Q Intercontinental's special order requires 1,900 kilograms of genatope, a solid chemical regularly used in the company's products. The current stock of genatope is 9,000 kilograms at a book value of 9.80 p per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of 10.40 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 10.00 p when normal restocking takes place. Any order of genatope must be in the amount of 6,500 kilograms. Exercise 14-37 Part 1 Required: 1. What is the relevant cost of genatope? (Enter your answer in pesos.) Total relevant cost p Required information Exercise 14-37 Special Order (LO 14-4, 14-5) [The following information applies to the questions displayed below.] Intercontinental's special order requires 1,900 kilograms of genatope, a solid chemical regularly used in the company's products. The current stock of genatope is 9,000 kilograms at a book value of 9.80 p per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of 10.40 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 10.00 p when normal restocking takes place. Any order of genatope must be in the amount of 6,500 kilograms. Exercise 14-37 Part 2 2. Identify the relevance of each of the figures given in the exercise in terms of making the special-order decision. (a) Book value of inventory (b) Quantity to be used in the special order (c) Predicted cost if next order is placed early (d) Predicted cost if next order is placed on time Exercise 14-40 Joint Products; Relevant Costs; Cost-Volume-Profit Analysis (LO 14-4, 14-6) Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are processed independently, a few are related. Grit 337, a coarse cleaning powder with many industrial uses, costs $1.60 a pound to make and sells for $2.80 a pound. A small portion of the annual production of this product is retained for further processing in the Mixing Department, where it is combined with several other ingredients to form a paste, which is marketed as a silver polish selling for $5.00 per jar. This further processing requires 1/4 pound of Grit 337 per jar. Costs of other ingredients, labor, and variable overhead associated with this further processing amount to $2.10 per jar. Variable selling costs are $0.50 per jar. If the decision were made to cease production of the silver polish, $9,100 of Mixing Department fixed costs could be avoided. Zytel has limited production capacity for Grit 337, but unlimited demand for the cleaning powder. Required: Calculate the minimum number of jars of silver polish that would have to be sold to justify further processing of Grit 337. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Minimum number of jars

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1 Relevant Cost of Genatope The relevant cost of genatope is the cost associated with restocking it earlier than expected taking into account the curr View the full answer