Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $390,000 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 Product A Selling Price $28.00 per pound $ 22.00 per pound $ 34.00 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 с Additional Processing Costs $ 91,990 $ 133,305 $62,660 Quarterly Output 14,600 pounds 22,700 pounds 5,800 gallons Selling Price $33.90 per pound $ 28.90 per pound $42.90 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

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 14E: LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units of Product X, 1,000 units of...
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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $390,000 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
Selling Price
$28.00 per pound
$22.00 per pound
$ 34.00 per gallon
Product
A
B
с
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
$ 91,990
$ 133,305
$ 62,660
Quarterly Output
14,600 pounds
22,700 pounds
5,800 gallons
Selling Price
$33.90 per pound
$28.90 per pound
$ 42.90 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?
Required 1
Complete this question by entering your answers in the tabs below.
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
Financial advantage (disadvantage) of further processing
Product C
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 $390,000 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 Selling Price $28.00 per pound $22.00 per pound $ 34.00 per gallon Product A B с 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 $ 91,990 $ 133,305 $ 62,660 Quarterly Output 14,600 pounds 22,700 pounds 5,800 gallons Selling Price $33.90 per pound $28.90 per pound $ 42.90 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? Required 1 Complete this question by entering your answers in the tabs below. 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 Financial advantage (disadvantage) of further processing Product C
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?
Product A
Sell at split-off point?
Process further?
Product B
Product C
Transcribed Image Text: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? Product A Sell at split-off point? Process further? Product B Product C
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