1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
jeyben [28]
3 years ago
12

Zytel Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are pro

cessed 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 $5.60 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 $0.40 per jar. If the decision were made to cease production of the silver polish, $8,800 of Mixing Department fixed costs could be avoided. Zytel has limited production capacity for Grit 337, but unlimited demand for the cleaning powder.
Required:1. 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 calculation to 2 decimal places and final answer to the nearest whole number.)
Business
1 answer:
SCORPION-xisa [38]3 years ago
8 0

Answer:

4,513 approx.

Explanation:

The computation of the minimum number of jars of silver polish is shown below:-

Sales revenue for one jar of silver polish    $5.60

Sales revenue for 1/4 pound of Grit 337     0.85

($3.40 ×  1 ÷ 4)

Incremental revenue from

further processing                                        $4.75

($5.60 - 0.85)

Incremental costs of further processing:

Processing costs                      $2.40

Selling costs                              $0.40          $2.80

Incremental contribution

margin from further

processing into silver polish

per jar                                                            $1.95

($4.75 - $2.80)

Point of indifference denotes the point where all options are equally profitable. But after that we will see that more processing is profitable. This is due to the fixed costs involved in further production.

Thus Minimum number of jars needed to produce to justify the further processing = Avoidable Fixed cost ÷ Incremental contribution

= $8,800 ÷ $1.95

= 4,513 approx.

You might be interested in
. Which of the following is not a way business markets and consumer markets differ?
Nataliya [291]

<em>The nature of the buying unit is not a way business markets and consumer markets differ</em>

<u>Answer:</u><u><em> </em></u><em>the nature of the buying unit</em>

<u>Explanation:</u>

Consumer market is basically a market that is Business to Consumer whereas a business market is mainly B2B market.

Most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals It can be seen that it is due to the market structure and demand. the nature of the buying unit is not a way to differentiate.

6 0
3 years ago
The Outlet Mall has a cost of equity of 16.8%, a pretax cost of debt of 8.1%, and a return on assets of 14.5%. Ignore taxes. Wha
krok68 [10]

Answer:

0.36

Explanation:

Cost of equity of 16.8%,

Pretax cost of debt of 8.1%

Return on assets of 14.5%

As per NN proposition: Cost of equity = Return on asset + D/E ratio (Return on asset-Cost of debt)

0.168 = 0.145 + D/E (0.145 - 0.082)

0.168 - 0.145 = D/E (0.064)

0.023 =  D/E (0.064)

D/E = 0.023/0.064

D/E = 0.359375

D/E = 0.36

Thus, the debt-equity ratio is 0.36

8 0
2 years ago
What are the differences between the​ long-run equilibrium of a perfectly competitive firm and the​ long-run equilibrium of a mo
Vadim26 [7]

Answer:

Unlike perfectly competitive firms, in the long run monopolistically competitive firms face excess capacity or unused capacity. They produced at a higher cost which implies wastage of resources or under-utilization of resources.

6 0
3 years ago
The inflation rate over the past year was 3.8 percent. If an investment had a real return of 6.9 percent, what was the nominal r
Natalka [10]

Answer:

Nominal rate of return= 10.96%

Explanation:

Inflation is the increase in the price level.It erodes the value of money.rise in the price of money

<em>Nominal interest is that quoted for investment or loan transactions. It has not been been adjusted for inflation.  </em>

<em>Real interest rate is the amount of interest in terms of the the quantity of good and services that can be purchased. It is the nominal interest rate adjusted for inflation. </em>

The relationship between inflation, real interest and nominal interest rate is given using the Fishers Effect;

N = ( (1+R) × (1+F)) - 1

N- nominal rate, R-real rate, F- inflation

Nominal rate of return =(1.038)× (1.069) - 1 = 0.109622

Nominal rate of return =  0.109622 × 100 = 10.96%

Nominal rate of return= 10.96%

6 0
3 years ago
Bloomfield Bakers accounts for its investment in Clor Confectionary under the equity method. Bloomfield carried the Clor investm
blagie [28]

Answer:

28%

Explanation:

let X = the percentage of ownership of Clor Confectionery

the investment account balance = $150,150 - X$20,500 + X75,650 = $165,550

$150,150 + X$55,150 = $165,550

X$55,150 = $15,400

X = $15,400 / $55,150 = 0.2792 = 27.92% ≈ 28%

6 0
2 years ago
Other questions:
  • Malcolm has been researching reports generated by government agencies and the local chamber of commerce. What kind of research i
    14·1 answer
  • A credit to a liability accounta.indicates an increase in the amount owed to creditors.b.indicates a decrease in the amount owed
    13·2 answers
  • Read the following paragraphs about four films and then identify the purpose of each paragraph: to summarize, to analyze, to syn
    11·1 answer
  • An initial license is issued in October of 2015. When must the license be renewed in order to prevent expiration?
    13·1 answer
  • Imagine that you are working at a clothing or grocery store, and answer the questions below about inventory and merchandising fo
    15·1 answer
  • The 3G Co. has $2,000,000 of assets, and its tax rate is 40%. Its basic earnings power ratio is 16%,and its ROA is 8%. What is i
    9·1 answer
  • Marvin had the following transactions: Salary $50,000 Interest on City of Chicago bonds $250 Bank loan (proceed to buy personal
    8·1 answer
  • 1. Please select each piece of information needed to calculate a real exchange rate.
    10·1 answer
  • Redi- Cor is trying to compile information about transactions between customers. Which of the following is not a reason Redi- Co
    7·2 answers
  • An increase in the price of a product will reduce the quantity demanded for that product because:________
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!