Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $360,000 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 C Product A Selling Price $ 22.00 per pound $ 16.00 per pound $28.00 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: 0 C Additional Processing Costs $ 75,970 Quarterly Output 13,400 pounds 20,900 pounds 4,600 gallons $ 109,395 $ 48,260 Selling Price $ 27.30 per pound $ 22.30 per pound $36.30 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?

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $360,000 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 C Product A Selling Price $ 22.00 per pound $ 16.00 per pound $28.00 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: 0 C Additional Processing Costs $ 75,970 Quarterly Output 13,400 pounds 20,900 pounds 4,600 gallons $ 109,395 $ 48,260 Selling Price $ 27.30 per pound $ 22.30 per pound $36.30 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $355,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on 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 a С Selling Price $ 21.00 per pound $15.00 per pound $27.00 per gallon Product A D C 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. Additional Processing Costa $ 73,440 Quarterly Output 13,200 pounds 20,600 pounds 4,400 gallons $ 105,620 $ 46,000 Selling Price $26.20 per pound $ 21.20 per pound $35.20 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the…
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $365,000 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 C Selling Price $23.00 per pound $17.00 per pound $29.00 per gallon Product A B C 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: Additional Processing Costs $78,540 $ 113,230 $50,560 Quarterly Output 13,600 pounds 21,200 pounds 4,800 gallons 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…
In a joint processing operation, Scarecrow Gardens Ltd. manufactures three varieties of products from a common input, corn. Joint processing costs up to the split-off point total $90,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: whole corn $57,000; dried corn kernels $65,000; and ground corn meal $74,500. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Additional Processing Costs Sales Value Whole Corn $27,175 $95,250 Dried Corn Kernels $29,760 $104,470 Ground Corn Meal $20,400 $92,300 REQUIRED: Which product or products should be sold at the split-off point, and which product or products should be processedfurther. Explain why…
Solve both questions with explanation and proper formatting
After allocating the joint process costs to its two joint products, Allomar Co. reports gross margin percentages of 30% for Product A and 40% for Product B. Sales reported for each product were $25,000 for Product A and $60,000 for Product B. Neither of the two products were processed beyond the split-off point. Calculate the total amount of joint costs assigned between the two products. Allocated joint costs Product A Product B Assuming Allomar used the physical quantities method to allocate the joint costs, what percentage of the total production volume did Product B represent? (Round answer to 2 decimal places, e.g. 15.25%.) Proportion of joint costs assigned to product B %
Windmill Corp. has three manufacturing divisions, each of which has been Determined to be reportable segment. Common costs are appropriately allocated on the basis of each division’s sales in relation to Windmill’s aggregate sales. In the current year, Division 1 had sales of P6,000,000, which was 20%of Windmill’s total sales, and had traceable cost of P3,800,00. Windmill incurred operating cost of P1,000,000 that were not directly traceable to any of the divisions. In addition, Windmill incurred interest expense of P600,000. In reporting segment information, what amount should be shown as operating profit of Division 1 for the current year?
Hanshaben
Atkinson, Inc., manufactures products A, B, and C from a common process. Joint costs were $154,680. Additional information is as follows: If Processed Further Product UnitsProduced Sales Value at Split-Off Sales Value Additional Costs A 7,110 $ 46,660 $ 64,435 $ 4,740 B 8,150 70,905 91,280 12,225 C 4,075 48,900 61,125 16,300 19,335 $ 166,465 $ 216,840 $ 33,265 Assuming that joint product costs are allocated using the net realizable value method, what were the total costs assigned to Product B? Multiple Choice $78,110. $77,906. $77,110. $79,396.
company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. 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 10,000 pounds A 4 per pound B 7 per pound 22,000 pounds 5,000 gallons 12 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: Additional Processing Costs Product Selling Price A $ $ 53,000 38,000 B $ $ с $ 18,000 $ Which products should be processed further? 7 per pound 11 per pound 18 per gallon
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $370,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on 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 $ 24.00 per pound 13,800 pounds B $ 18.00 per pound 21,500 pounds C $ 30.00 per gallon 5,000 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 $ 81,150 $ 29.50 per pound B $ 117,125 $ 24.50 per pound C $ 52,900 $ 38.50 per gallon Required: What is the financial advantage (disadvantage)…
Company produced and sold 30,000 units Product K and 2,000 units by-product W from the same process with joint cost P420,000. At split-off, the selling prices for K is P25 per unit while W is P5 per unit. BSBA desires P4,000 net profit on by-products. Using the reversal cost method in accounting for by-products, what is the unit cost of Product K and total cost of goods sold, respectively P13.80 and P420,000 P14.00 and P414,000 P14.00 and P420,000 P13.80 and P414,000
None