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?
Essentials Of Business Analytics
1st Edition
ISBN:9781285187273
Author:Camm, Jeff.
Publisher:Camm, Jeff.
Chapter11: Monte Carlo Simulation
Section: Chapter Questions
Problem 2P
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