Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 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 Selling Price $20.00 per pound Quarterly Output 13,000 pounds B $ 14.00 per pound 20,300 pounds C $26.00 per gallon 4,200 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 Additional Processing Costs $ 70,950 Selling Price $25.10 per pound Product A B $ 101,905 C $ 43,780 $ 34.10 per gallon $ 20.10 per pound ces 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.) Financial advantage (disadvantage) of further processing
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 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 Selling Price $20.00 per pound Quarterly Output 13,000 pounds B $ 14.00 per pound 20,300 pounds C $26.00 per gallon 4,200 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 Additional Processing Costs $ 70,950 Selling Price $25.10 per pound Product A B $ 101,905 C $ 43,780 $ 34.10 per gallon $ 20.10 per pound ces 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.) Financial advantage (disadvantage) of further processing
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Solve both questions with explanation and proper formatting
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 $350,000 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
Selling Price
$20.00 per pound
Quarterly Output
13,000 pounds
B
$ 14.00 per pound
20,300 pounds
C
$26.00 per gallon
4,200 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
Additional
Processing
Costs
$ 70,950
Selling Price
$25.10 per pound
Product
A
B
$ 101,905
C
$ 43,780
$ 34.10 per gallon
$ 20.10 per pound
ces
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.)
Financial advantage (disadvantage) of further processing
<Required 1
Product A
Product B
Product C
Required 2 >
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