Exercise 13-7 (Algo) Sell or Process Further Decisions [LO13-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 $ 12.00 per pound $6.00 per pound B C $18.00 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: Product A B C Additional Processing Costs $ 52,470 $ 74,345 $ 27,460 Quarterly Output 11,400 pounds 17,900 pounds 2,600 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 analysis in requirement 1, which product or products should be sold at the split-off point and which should be processed further? Required 1 Selling Price $16.30 per pound $11.30 per pound $25.30 per gallon Complete this question by entering your answers in the tabs below. Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Financial advantage (disadvantage) of further processing < Required 1 Product A Product B Required 2 > Product C
Exercise 13-7 (Algo) Sell or Process Further Decisions [LO13-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 $ 12.00 per pound $6.00 per pound B C $18.00 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: Product A B C Additional Processing Costs $ 52,470 $ 74,345 $ 27,460 Quarterly Output 11,400 pounds 17,900 pounds 2,600 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 analysis in requirement 1, which product or products should be sold at the split-off point and which should be processed further? Required 1 Selling Price $16.30 per pound $11.30 per pound $25.30 per gallon Complete this question by entering your answers in the tabs below. Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Financial advantage (disadvantage) of further processing < Required 1 Product A Product B Required 2 > Product C
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 13-7 (Algo) Sell or Process Further Decisions [LO13-7]
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $310,000 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
Selling Price
$ 12.00 per pound
$ 6.00 per pound
$18.00 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
$ 52,470
$ 74,345
$ 27,460
Quarterly Output
11,400 pounds
17,900 pounds
2,600 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 analysis in requirement 1, which product or products should be sold at the split-off point and which should be
processed further?
Required 1
Selling Price
$ 16.30 per pound
$ 11.30 per pound
$ 25.30 per gallon
Complete this question by entering your answers in the tabs below.
Required 2
What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?
Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value.
Financial advantage (disadvantage) of further processing
< Required 1
Product A
Product B
Required 2 >
Product C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb654e03a-c3bd-4302-8058-738c4eac3b20%2F77030e7e-bcec-4f2b-a637-2e1650bd93fb%2F5xi4hm_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 13-7 (Algo) Sell or Process Further Decisions [LO13-7]
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $310,000 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
Selling Price
$ 12.00 per pound
$ 6.00 per pound
$18.00 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
$ 52,470
$ 74,345
$ 27,460
Quarterly Output
11,400 pounds
17,900 pounds
2,600 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 analysis in requirement 1, which product or products should be sold at the split-off point and which should be
processed further?
Required 1
Selling Price
$ 16.30 per pound
$ 11.30 per pound
$ 25.30 per gallon
Complete this question by entering your answers in the tabs below.
Required 2
What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?
Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value.
Financial advantage (disadvantage) of further processing
< Required 1
Product A
Product B
Required 2 >
Product C
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