tpx are related, such as the company\'s Grit 337 and its Sparkle silver polish G

Question

tpx are related, such as the company's Grit 337 and its Sparkle silver polish Grit 337 is retained in the factory for further processing. It is $6.00 per jar and solutions for both industrial and household use. While most of its products are processing requires one-fourth pound of Grit 337 per jar of silver polish. The additional direct costs involved in the processed independently, a few to form a paste that is marketed as Sparkle silver polish. The silver polish seils for Direct labor 0 50 processing of a jar of sliver polish are: S 190 S 3.000 S 1400 The labor is a variable cost at and it does not wear out through use costs associated winte siver poish are 5% of sales.

Explanation / Answer

Answer 1. Selling Price of Silver Polish, per Jar              6.00 SP of 1/4 Pound of Grit 337 - $11.80 X 1/4              2.75 Incremental Revenue per Jar           3.25 Incremental Variable Cost per Jar Other Ingredients              0.50 Direct Labor              1.40 Variable MOH - 25% X $1.40              0.35 Variable Selling Costs - 5% X $6              0.30 Incremental Variable Cost per Jar           2.55 Incrmental Contribution per Jar           0.70 Answer 2. Minimum No. of Jars to be Sold = Additional Fixed Costs / Incremental CM per Jar Production Supervisor      3,000.00 Dep. - Mixing Equipment      1,400.00 Advt. Costs      2,000.00 Total Additional Fixed Costs      6,400.00 Minimum No. of Jars to be Sold = $6,400 / $0.70 Minimum No. of Jars to be Sold = 9,142.857 or say 9,143 Jars (Approx.)

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