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Problem 1: Calculate the minimum number of units of SilPol that would have to be sold in order to justify further processing of GR37.
Problem 2: Assume that the cost data reported for GR37 are obtained at a level of output equal to 6,000 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 8,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 10,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 12,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37.
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