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.)
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
Foreign exchange dealers make money or profit by buying stock at lower price and selling the same at a higher price. They do this by adding a markup on the price of stock bought by them and sell the same to a buyer. The markup serves as profit to dealers.
Foreign exchange brokers act as intermediary between buyers and sellers as traders could execute trades through a brokers only. A broker earns profit in the form of commissions and fees earned on executing each transaction.
Consumer surplus is the difference between the maximum
amount the consumer is willing to pay for the price of the good and the price
that was actually paid by the consumer or commonly known as the current market
price. The price that the consumer is willing to pay is determined by the
demand curve in the market.
B. Avoid gossip Getting along with team means being yourself and not gossiping with others.
C is not the answer because you want to make sure you are aware of complaints. D is not the answer because when you give gifts, sometimes people can take advantage of you because they know you want to get along with them A is not the answer because to get along and work together you have to share ideas
