Reference no: EM132997841

Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are producedas part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commercial sale, costs $2.30 apound to make and sells for $2.40 per pound. A portion of the annual production of GR37 is retained for further processing in a separatedepartment where it is combined with several other ingredients to form SilPol, which is sold as a silver polish, at $5.00 per unit. Theadditional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $3.30 per unit of SilPol produced.Variable selling costs for SilPol average $0.20 per unit. If production of SilPol were discontinued, $6,300 of costs in the processingdepartment would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37.

Problem 1: Solve the minimum number of units of SilPol that would have to be sold in order to justify further processing of GR37?