Dorsey Company manufactures three products from a common Input In a jolnt processing operation. Joint processing costs up to thesplit-off polnt total $390,000 per quarter. For financlal reporting purposes, the company allocates these costs to the joint products onthe basis of their relative sales value at the split-off polnt. Unit selling prices and total output at the split-off polnt are as follows:QuarterlyOutput14,600 pounds22,700 pounds5,800 gallonsProductselling Price$ 28.00 per pound$ 22.00 per pound$ 34.00 per gallonABEach product can be processed further after the split-off polnt. Additlonal processing requlres no special facilitles. The additionalprocessing costs (per quarter) and unit selling prices after further processing are given below:AdditionalProduct Processing Costs$ 91,990$133,305$ 62,660sellingPrice$33.90 per pound$28.90 per pound$42.90 per gallonABRequlred:1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off polnt?2. Based on your analysis in requirement 1, which product or products should be sold at the split-off polnt and whlch product orproducts should be processed further?

1. Product A Product B Product C The sale price after the further processing- A $33.90 $28.90…

Dorsey Company manufactures three products from a common Input In a joint processing operation. Jolnt processing costs up to the split-off polnt total $390,000 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 polnt. Unit selling prices and total output at the split-off polnt are as follows: Quarterly output 14,600 pounds 22,700 pounds 5,800 gallons Product Selling Price $ 28.00 per $ 22.00 per pound $ 34.00 per gallon в Each product can be processed further after the split-off polnt. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below. selling Price $33.90 per pound $28.90 per pound $42.90 per gallon Additional Product Processing Costs $ 91,990 $133,305 $ 62,660 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 polnt and whlch product or products should be processed further?

Dorsey Company manufactures three products from a common Input In a joint processing operation. Jolnt processing costs up to the split-off polnt total $390,000 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 polnt. Unit selling prices and total output at the split-off polnt are as follows: Quarterly output 14,600 pounds 22,700 pounds 5,800 gallons Product Selling Price $ 28.00 per $ 22.00 per pound $ 34.00 per gallon в Each product can be processed further after the split-off polnt. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below. selling Price $33.90 per pound $28.90 per pound $42.90 per gallon Additional Product Processing Costs $ 91,990 $133,305 $ 62,660 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 polnt and whlch 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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