Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $315,000 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 Selling Price Quarterly Output A $ 13.00 per pound 11,600 pounds B $ 7.00 per pound 18,200 pounds C $ 19.00 per gallon 2,800 gallons 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: Product Additional Processing Costs Selling Price A $ 54,640 $ 17.40 per pound B $ 77,580 $ 12.40 per pound C $ 29,360 $ 26.40 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?
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint
Product | Selling Price | Quarterly Output | ||
---|---|---|---|---|
A | $ 13.00 | per pound | 11,600 | pounds |
B | $ 7.00 | per pound | 18,200 | pounds |
C | $ 19.00 | per gallon | 2,800 | gallons |
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:
Product | Additional Processing Costs | Selling Price | |
---|---|---|---|
A | $ 54,640 | $ 17.40 | per pound |
B | $ 77,580 | $ 12.40 | per pound |
C | $ 29,360 | $ 26.40 | 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?
![Product
A
B
C
Processing
Costs
$ 54,640
$ 77,580
$ 29,360
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?
Selling Price
$17.40 per pound
$ 12.40 per pound
$26.40 per gallon
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6b601fba-5f21-450e-bf33-90ce0182d9d7%2F794524ca-5937-4718-ad7b-e72c062ff01e%2Fx352ghr_processed.png&w=3840&q=75)
![Product
ABC
Processing
Costs
$ 54,640
$ 77,580
$ 29,360
Selling Price
$17.40 per pound
$ 12.40 per pound
$26.40 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.)
Financial advantage (disadvantage) of further processing
Product A
Product B
Product C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6b601fba-5f21-450e-bf33-90ce0182d9d7%2F794524ca-5937-4718-ad7b-e72c062ff01e%2F9g4bf_processed.png&w=3840&q=75)
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