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Dorsey Company manufactures three products from a common input in a joint processing split-off point total $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products 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: Selling Price $16 per pound $a per pound $25 per gallon Product A C Product A 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: Quarterly Output 15,000 pounds 20,000 pounds 4,000 gallons Additional Processing Costs $ 63,000 $ 80,000 $36,000 Selling Price $ 20 per pound $ 13 per pound $ 32 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 split-off point total $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products 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: Selling Price $16 per pound $a per pound $25 per gallon Product A C Product A 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: Quarterly Output 15,000 pounds 20,000 pounds 4,000 gallons Additional Processing Costs $ 63,000 $ 80,000 $36,000 Selling Price $ 20 per pound $ 13 per pound $ 32 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?

FINANCIAL ACCOUNTING
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 $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 Selling Price $ 16 per pound $8 per pound $25 per gallon Product A 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 $ 63,000 $ 80,000 $36,000 Quarterly Output 15,000 pounds 20,000 pounds 4,000 gallons Selling Price $ 20 per pound $ 13 per pound $ 32 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? Required 1 Required 2 Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Enter "disadvantages" as a negative value.) Financial advantage (disadvantage) of further processing Product A Product B Required 2 > Product C
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 Selling Price $ 16 per pound $8 per pound $25 per gallon Product A 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 $ 63,000 $ 80,000 $36,000 Quarterly Output 15,000 pounds 20,000 pounds 4,000 gallons Selling Price $ 20 per pound $ 13 per pound $ 32 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? Required 1 Required 2 Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Enter "disadvantages" as a negative value.) Financial advantage (disadvantage) of further processing Product A Product B Required 2 > Product C
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