Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product B Product A Selling Price $ 12.00 per pound $ 6.00 per pound $ 18.00 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: B C Additional Processing Costs $ 52,470 Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons $ 74,345 $27,460 Selling Price $16.30 per pound $ 11.30 per pound $ 25.30 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Do not round your intermediate calculations. Enter "disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or
products should be processed further?
Sell at split-off point?
Process further?
Product A
Product B
Product C
< Required 1
Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Sell at split-off point? Process further? Product A Product B Product C < Required 1 Required 2 >
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $310,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on
the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
Product
A
B
Product
A
Selling Price
$ 12.00 per pound
$6.00 per pound
$ 18.00 per gallon
Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional
processing costs (per quarter) and unit selling prices after further processing are given below:
B
C
Quarterly Output
11,400 pounds
17,900 pounds
2,600 gallons
Additional
Processing
Costs
$ 52,470
$ 74,345
$27,460
Selling Price
$16.30 per pound
$ 11.30 per pound
$ 25.30 per gallon
Required:
1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?
2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or
products should be processed further?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?
(Do not round your intermediate calculations. Enter "disadvantages" as a negative value.)
Product A Product B Product C
Financial advantage (disadvantage) of further processing
Transcribed Image Text:Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product A B Product A Selling Price $ 12.00 per pound $6.00 per pound $ 18.00 per gallon Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: B C Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons Additional Processing Costs $ 52,470 $ 74,345 $27,460 Selling Price $16.30 per pound $ 11.30 per pound $ 25.30 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Do not round your intermediate calculations. Enter "disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing
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