Calculate the companys total weekly gross profit

This preview shows page 1 - 6 out of 10 pages.

Calculate the company's total weekly gross profit assuming the table cleaner is not processed further. (a)(2) Calculate the company's total weekly gross profit assuming the table cleaner is processed further.
FileName: 13e80e1fd4558b9f526aa1ff81d0d45b30c8ef42.xls, Tab: Problem P7-38A, Page 2 of 10, 06/15/2016, 13:38:47 Enter text answer here. Title Amount Amount Amount Title Amount Amount Amount Totals Formula Formula Formula Enter text answer here. (a)(3) Compare the resulting net incomes and comment on management's decision. (b) Using incremental analysis, determine if the table cleaner should be processed further. Process Table Cleaner Further Process Table Cleaner Further Net Income Increase (Decrease)
FileName: 13e80e1fd4558b9f526aa1ff81d0d45b30c8ef42.xls, Tab: Problem P7-38A, Page 3 of 10, 06/15/2016, 13:38:47 27,000 cleaner ade name per litres litres $120,000 ost, which is 50% t
FileName: 13e80e1fd4558b9f526aa1ff81d0d45b30c8ef42.xls, Tab: Problem P7-38A, Page 4 of 10, 06/15/2016, 13:38:47
Name: 0 Date: 12/30/99 Instructor: 0 Course: 0 produces two products: a table cleaner and a floor cleaner from a common set of chemical inputs (CDG). Each week litres of chemical input are processed at a cost of $210,000 into 18,000 litres of floor and 9,000 litres of table cleaner. The floor cleaner has no market value until it is converted into a polish with the tra FloorShine. The additional processing costs for this conversion total $250,000 FloorShine sells at $20 per 1 litre bottle. The table cleaner can be sold for $25 1 litre bottle. However, the table cleaner can be converted into two other products by adding 9,000 of another compound (TCP) to the 9,000 litres of table cleaner. This joint process will yield 9,000 each of the table stain remover (TSR) and the table polish (TP). The additional processing costs for this process are Both table products can be sold for $20 per 1 litre bottle. The company decided not to process the table cleaner into TSR and TP based on the following analysis: Process Further Total Production in litres (9,000) 9,000 9,000 Revenue $225,000 $180,000 $180,000 $360,000 Costs: CDG costs 70,000 52,500 52,500 105,000 TCP costs - 60,000 60,000 120,000 Total costs 70,000 112,500 112,500 225,000 Weekly gross profit $155,000 $67,500 $67,500 $135,000 If the table cleaner is not processed further it is allocated 1/3 of the $210,000 of CDG co equal to 1/3 of the total physical output. If the table cleaner is processed further, total physical output is 36,000 litres. TSR and TP combined account for of the total physical output and are each allocated 25% of the CDG cost. Instructions: Table Cleaner Not Processed Further Sales: FloorShine (18,000 ÷ 1) X $20) 360,000 Table Cleaner (9,000 ÷ 1) X $25) 225,000 Total revenue 585,000 Costs: CDG 210,000 Additional costs of FloorShine 250,000 Total costs 460,000 Gross profit $125,000
Table Cleaner Processed Further Sales:
FileName: 13e80e1fd4558b9f526aa1ff81d0d45b30c8ef42.xls, Tab: Solution P7-38A, Page 5 of 10, 06/15/2016, 13:38:47

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture