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Come$-$Clean Corporation produces a variety of cleaning compounds including Grit $337$ and Sparkle silver polish. Grit $337$ is a coarse cleaning powder that costs $$1\mathrm{.}20$ a pound to make and sells for $$7\mathrm{.}20$ a pound. A small portion of Grit $337$ is combined with several other ingredients and further processed into Sparkle silver polish. The silver polish sells for $$5\mathrm{.}00$ per jar.

This further processing requires one$-$fourth pound of Grit $337$ per jar of silver polish. The additional variable manufacturing costs per jar of silver polish are:

Other ingredients $ $0\mathrm{.}60$

Direct labor $1\mathrm{.}40$

Additional variable manufacturing cost $ $2\mathrm{.}00$

Overhead costs associated with processing the silver polish are:

Variable manufacturing overhead cost $25\%$ of direct labor cost

Fixed manufacturing overhead cost $($per month$)$

Production supervisor $ $3,100$

Depreciation of mixing equipment $ $1,500$

The production supervisor has no duties other than overseeing production of the silver polish. The mixing equipment is special$-$purpose equipment acquired specifically to produce the silver polish. It can produce up to $4,500$ jars of polish per month. Its resale value is negligible and it does not wear out through use.

Advertising costs for the silver polish total $$2,900$ per month. Variable selling costs for the silver polish are $5\%$ of sales.

Due to a decline in the demand for silver polish, the company is considering selling all of its Grit $337$ for $$7\mathrm{.}20$ per pound and discontinuing Sparkle silver polish.

Required:

$1.$ How much incremental revenue does the company earn per jar of polish by further processing Grit $337$ rather than selling it as a cleaning powder?

$2.$ How much incremental contribution margin does the company earn per jar of polish by further processing Grit $337$ rather than selling it as a cleaning powder?

$3.$ How many jars of silver polish must be sold each month to exactly offset the avoidable fixed costs incurred to produce and sell the polish?

$4.$ If the company sells $7,900$ jars of polish, what is the financial advantage $($disadvantage$)$ of choosing to further process Grit $337$ rather than selling it as a cleaning powder?

$5.$ If the company sells $12,000$ jars of polish, what is the financial advantage $($disadvantage$)$ of choosing to further process Grit $337$ rather than selling it as a cleaning powder?

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