Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $385.000 per quarter. For financial reporting purposes, the company allocates these costs to the jolnt products or the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off polnt are as follows: Selling Peice $27.00 per pound $ 21.00 per pound $33.00 per gallon Quarterly Output 14,400 pounds 22, 400 pounds 5,600 gallons Product 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 glven below: Additional Product Processing Costs $ 89, 220 $129, 170 $60,160 Selling Price $32.80 per pound $27.80 per pound $41.80 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 $385.000 per quarter. For financial reporting purposes, the company allocates these costs to the jolnt products or the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off polnt are as follows: Selling Peice $27.00 per pound $ 21.00 per pound $33.00 per gallon Quarterly Output 14,400 pounds 22, 400 pounds 5,600 gallons Product 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 glven below: Additional Product Processing Costs $ 89, 220 $129, 170 $60,160 Selling Price $32.80 per pound $27.80 per pound $41.80 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

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First using cash accounting, and then accrual accounting, discuss what the balances of each account will be on May 31, 2019 at Hippie Hospital for the financial period below, taking into consideration the transactions listed. Then, discuss why/how you arrived at your answer for each ending account balance. Beginning account balances for May 2019: Assets = $1,400,000 Liabilities = $500,000 Net Assets = $890,900 Revenue = $25,000 Expenses = $15,900 Transaction #1 (May 4, 2019) - the hospital signed a purchase order for a $2,500 supply purchase, which will be delivered/completed in mid-June. Transaction #2 (May 15, 2019) - the hospital provided $15,000 in patient care services and billed patients' insurance plans. Transaction #3 (May 25, 2019) - the hospital took out a loan for $4,000 to meet future, unexpected payroll obligations.
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