Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 14, Problem 40E
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 $2.00 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 $4.00 per jar. This further processing requires ¼ pound of Grit 337 per jar. Costs of other ingredients, labor, and variable
Required: Calculate the minimum number of jars of silver polish that would have to be sold to justify further processing of Grit 337.
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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 $2.20 a pound to
make and sells for $3.40 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
$5.10 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 $2.40 per jar. Variable selling costs are $0.30 per jar. If the decision were made to
cease production,of the silver polish, $8,500 of Mixing Department fixed costs could be avoided. Zytel has limited production capacity
for Grit 337, but unlimited demand for the cleaning powder.…
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 $1.80 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 1/5 pound of GR37 per unit; additional processing costs amount to $3.70 per unit of SilPol produced. Variable selling costs for SilPol average $0.20 per unit. If production of SilPol were discontinued, $4,900 of costs in the processing department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37.
2. Assume that the cost data reported for GR37 are obtained at a level of output…
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 $2.30 a pound to make and sells for $2.40 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 $6.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $4.20 per unit of SilPol produced. Variable selling costs for SilPol average $0.60 per unit. If production of SilPol were discontinued, $7,200 of costs in the processing department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37.
1. Calculate the minimum number of units of SilPol that would have to be sold in…
Chapter 14 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 14 - Prob. 1RQCh. 14 - Describe the managerial accountants role in the...Ch. 14 - Distinguish between qualitative and quantitative...Ch. 14 - Prob. 4RQCh. 14 - A quantitative analysis enables a decision maker...Ch. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Is the book value of inventory on hand a relevant...Ch. 14 - Why might a manager exhibit a behavioral tendency...
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Briefly describe the proper approach for making a...Ch. 14 - Prob. 17RQCh. 14 - Are allocated joint processing costs relevant when...Ch. 14 - Briefly describe the proper approach to making a...Ch. 14 - What is meant by the term contribution margin per...Ch. 14 - How is sensitivity analysis used to cope with...Ch. 14 - There is an important link between decision making...Ch. 14 - List four potential pitfalls in decision making,...Ch. 14 - Why can unitized fixed costs cause errors in...Ch. 14 - Prob. 25RQCh. 14 - Prob. 26RQCh. 14 - Are the concepts underlying a relevant-cost...Ch. 14 - Prob. 28RQCh. 14 - Redo Exhibit 144 without the irrelevant data.Ch. 14 - Valley Pizzas owner bought his current pizza oven...Ch. 14 - Lamont Industries produces chemicals for the...Ch. 14 - Day Street Delis owner is disturbed by the poor...Ch. 14 - Prob. 35ECh. 14 - Intercontinental Chemical Company, located in...Ch. 14 - Intercontinentals special order also requires...Ch. 14 - Fusion Metals Company is considering the...Ch. 14 - Prob. 39ECh. 14 - Zytel Corporation produces cleaning compounds and...Ch. 14 - Duo Company manufactures two products, Uno and...Ch. 14 - Refer to the data given in the preceding exercise...Ch. 14 - Southern California Chemical Company manufactures...Ch. 14 - Kitchen Magician, Inc. has assembled the following...Ch. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Tipton One-Stop Decorating sells paint and paint...Ch. 14 - Carpenters Mate, Inc. manufactures electric...Ch. 14 - Casting Technology Resources (CTR) has purchased...Ch. 14 - The Midwest Division of the Paibec Corporation...Ch. 14 - Prob. 51PCh. 14 - Prob. 52PCh. 14 - Upstate Mechanical, Inc. has been producing two...Ch. 14 - Chenango Industries uses 10 units of part JR63...Ch. 14 - Miami Industries received an order for a piece of...Ch. 14 - Prob. 56PCh. 14 - Ozark Industries manufactures and sells three...Ch. 14 - Prob. 58PCh. 14 - Deru Chocolate Company manufactures two popular...Ch. 14 - Prob. 60PCh. 14 - Prob. 61PCh. 14 - Bo Vonderweidt, the production manager for...Ch. 14 - Alberta Gauge Company, Ltd., a small manufacturing...
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