Dorsey Company manufactures three products from a common input in a jointprocessing operation. Joint processing costs up to the split-off point total$90,000 per quarter. The company allocates these costs to the joint productson the basis of their relative sales value at the split-off point. Unit sellingprices and total output at the split-off point are as follows:Product Selling PriceQuarterly OutputA$3 per pound17,000 poundsB$4 per pound22,000 poundsC$12 per gallon5,000 gallonsEach product can be processed further after the split-off point. Additionalprocessing requires no special facilities.The additional processing costs (per quarter) and unit selling prices afterfurther processing are given below:Product Additional Processing CostsSelling PriceAS36,000$5per poundsBS35,000$7 per poundsCS11,000$ 16 per gallonsRequired:Compute the incremental profit (loss) for each product.ProductProductProductABCSelling price after further processingSelling price at the split-off pointIncremental revenue per pound or gallonTotal quarterly output in pounds orgallonsTotal incremental revenueTotal incremental processing costsTotal incremental profit or loss

Explanation of The Relevant Costs to Selling or Processing Materials Further:The relevant costs for…

Answered: Dorsey Company manufactures three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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 $360,000 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 Selling Price Quarterly Output A $ 22.00 per pound 13,400 pounds B $ 16.00 per pound 20,900 pounds C $ 28.00 per gallon 4,600 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 $ 75,970 Selling Price $ 27.30 per pound $ 22.30 per pound A B $ 109,395 C $ 48,260 $ 36.30 per gallon Required: 1. What is the 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 $305,000 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 $11.00 per pound $5.00 per pound $ 17.00 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 C Additional Processing Costs $ 50,340 $71,170 $ 25,600 Quarterly Output 11,200 pounds 17,600 pounds 2,400 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…
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Harmon Inc. produces joint products L, M, and N from a joint process. Information concerning a batch produced in May at a joint cost of $85,000 was as follows: The amount of joint costs allocated to product L using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): J Harmon Inc. produces joint products L, M, and N from a joint process. Information concerning a batch produced in May at a joint cost of $85,000 was as follows: C Separable Processing cost Units Produced Sales Value (after addt'l processing) L M N Total $11,000 $27,000 $5,000 $ 43,000 1,600 3,500 4,700 9,800 $64,000 $55,000 $13,000 $132,000 The amount of joint costs allocated to product L using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
not graded Joint CostCheyenne, Inc. produces three products from a common input. The joint costs for a typical quarter follow: Direct materials $49,000 Direct labor 59,000 Overhead 64,000 The revenues from each product are as follows: Product A $77,000 Product B 82,000 Product C 32,000 Management is considering processing Product A beyond the split-off point, which would increase the sales value of Product A to $116,000. However, to process Product A further means that the company must rent some special equipment costing $17,500 per quarter. Additional materials and labor also needed would cost $12,650 per quarter. a. What is the gross profit currently being earned by the three products for one quarter? $Answer b. What is the effect on quarterly profits if the company decides to process Product A further? $Answer
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 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 с Product A B с Selling Price $27.00 per pound $21.00 per pound $ 33.00 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: Additional Processing Costs $ 89,220 $ 129,170 $ 60,160 Quarterly Output 14,400 pounds 22,400 pounds 5,600 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.…
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In a joint processing operation, Nolen Company manufactures three grades of sugar from a common input, sugar cane. Joint processing costs up to the split-off point total $42,100 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: raw sugar, $21,700; brown sugar, $21,700; and white sugar, $24,700. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product Additional Processing Costs Sales Value Raw sugar $ 19,600 $ 40,100 Brown sugar $ 14,800 $ 38,000 White sugar $ 5,900 $ 42,500 Required: a. Compute the Incremental profit (loss) for each product. (Loss amounts should be indicated by a minus sign.)
Tango Company produces joint products M, N, and T from a joint process. This information concerns a batch produced in April at a joint cost of $190,000: Product M N T Units Produced and Sold 17,000 11,000 12,000 Product M N T Allocated Joint Cost After Split-Off Total Separable Costs $ 18,800 16,400 3,800 Total Final Sales. Value Required: How much of the joint cost should be allocated to each joint product using the net realizable value method? (Do not round intermediate calculations. Enter your final answers in whole dollars.) $ 230,000 210,000 39,000

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