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 B C Product Selling Price $ 21.00 per pound $15.00 per pound $ 27.00 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: D C Quarterly Output 13,200 pounds 20,600 pounds 4,400 gallons Additional Processing Costa $ 73,440 $ 105,620 $ 46,000 Selling Price $26.20 per pound $ 21.20 per pound t $35.20 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 cold at 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 $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 B C Product Selling Price $ 21.00 per pound $15.00 per pound $ 27.00 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: D C Quarterly Output 13,200 pounds 20,600 pounds 4,400 gallons Additional Processing Costa $ 73,440 $ 105,620 $ 46,000 Selling Price $26.20 per pound $ 21.20 per pound t $35.20 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 cold at the

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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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $395,000 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 Selling Price $29.00 per pound $23.00 per pound Quarterly Output 14,800 pounds B 23,000 pounds C $ 35.00 per gallon 6,000 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 A Additional Processing Costs $ 94,800 Selling Price $ 35.00 per pound $ 30.00 per pound B $ 137,500 C $ 65,200 $ 44.00 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of…
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $330,000 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 B с Selling Price $16.00 per pound $ 10.00 per pound $22.00 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 $ 61,390 $ 87,645 $ 35,300 Quarterly Output 12,200 pounds 19,100 pounds 3,400 gallons Required 1 Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on…
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 58,000 to 98,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume the company produces and sells 88,000 units during the year at a selling price of $9.74 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. Note: Round the per unit variable cost and fixed cost to 2 decimal places. Units Produced and Sold 58,000 78,000 98,000 Total cost: Variable cost $ 179,800 Fixed cost 440,000 Total cost $ 619,800 Cost per unit: Variable cost Fixed cost Total cost nor unit
Vinubhai
A company has two divisions, C and E; both are operating as a profit center. C charges E $35 per unit for each unit transferred to B. Other data follow:C's variable cost per unit $35C's fixed costs $25,000C's annual sales to B 15,000 unitsC's annual sales to outsiders 70,000 unitsC is planning to raise its transfer price to $45 per unit. Division E can purchase units at $43 each from outsiders, but doing so would idle C's facilities now committed to producing units for E. Division C cannot increase its sales to outsiders. From the perspective of the company as a whole, from whom should Division E acquire the units, assuming E's market is unaffected? a. Division C, but only at the variable cost per unit b. Outside vendors c. Division C, in spite of the increased transfer price d. Division C, but only until fixed costs are covered, then should purchase from outside vendors
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.67 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit $ $ 55,000 Units Produced and Sold 75,000 187,000 320,000 507,000 95,000
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…
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
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 53,000 to 93,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 83,000 units during the year at a selling price of $9.29 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 1 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost Variable cost Fixed cost Total cost Cost por unit: Required 2 Variable cost Fixed cost Total cost per unit 53,000 Units Produced and Sold $ S $ Required 1 Required 2 73,000 Units Produced and Sold 185,500 350,000…
D’Souza Company sold 12,000 units of its product for $76.00 per unit. Cost of goods sold is $54.60 per unit. Each unit had $49.20 in variable cost of goods sold and variable selling and administrative expenses are $9.60 per unit. Compute gross profit under absorption costing.
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)…