# Industrial products inc tipi is a diversified

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Industrial Products Inc. (TIPI) is a diversified industrial- cleaner processing company. The company's Dargan plant produces two products: a table cleaner and a floor cleaner from a common set of chemical inputs (CDG). Each week, 855,000 ounces of chemical input are processed at a cost of \$207,000 into 570,000 ounces of floor cleaner and 285,000 ounces of table cleaner. The floor cleaner has no market value until it is converted into a polish with the trade name Floor Shine. The additional processing costs for this
conversion amount to \$240,000. Floor Shine sells at \$18 per 30-ounce bottle. The table cleaner can be sold for \$17 per 25- ounce bottle. However, the table cleaner can be converted into two other products by adding 285,000 ounces of another compound (TCP) to the 285,000 ounces of table cleaner. This joint process will yield 285,000 ounces each of table stain remover (TSR) and table polish (TP). The additional processing costs for this process amount to \$100,000. Both table products can be sold for \$14 per 25-ounce bottle. The company decided not to process the table cleaner into TSR and TP based on the following analysis. Process Further Table Stain Remover (TSR) Table Cleaner Table Polish (TP) 285,000 Total Production in ounces 285,000 285,000 \$193,800 Revenues \$159,600 \$ 159,600 \$319,200 Costs: CDG costs 69,000 TCP costs 51,750 50,000 101,750 \$57,850 51,750 103,500 ** 50,000 100,000 101,750 203,500 \$57,850 \$115,700 Total costs Weekly gross profit 69,000 \$124,800 *If table cleaner is not processed further, it is allocated 1/3 of