Exercise 6-7 (Algo) Sell or Process Further Decisions [LO6-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $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 C Selling Price $ 27.00 per pound $ 21.00 per pound $ 33.00 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 Quarterly Output 14,480 pounds 22,400 pounds 5,600 gallons $ 89,220 $ 129,170 $ 60,160 Selling Price $32.80 per pound $ 27.80 per pound $41.80 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? Complete this question by entering your answers in the tabs below.
Exercise 6-7 (Algo) Sell or Process Further Decisions [LO6-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $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 C Selling Price $ 27.00 per pound $ 21.00 per pound $ 33.00 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 Quarterly Output 14,480 pounds 22,400 pounds 5,600 gallons $ 89,220 $ 129,170 $ 60,160 Selling Price $32.80 per pound $ 27.80 per pound $41.80 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? Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 6-7 (Algo) Sell or Process Further Decisions [LO6-7]
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $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
C
Selling Price
$ 27.00 per pound
$ 21.00 per pound
$ 33.00 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
$ 89,220
$ 129,170
$ 60,160
Quarterly Output
14,480 pounds
22,400 pounds
5,600 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 product or
products should be processed further?
Required 1
Selling Price
$32.80 per pound
$ 27.80 per pound
$41.80 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
Product A Product B
Product C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F349709f6-3e99-49ce-9384-9f2b79e0bb19%2F388da17f-21c0-4a34-b1dc-3340323e7706%2F0oj2e5_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 6-7 (Algo) Sell or Process Further Decisions [LO6-7]
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $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
C
Selling Price
$ 27.00 per pound
$ 21.00 per pound
$ 33.00 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
$ 89,220
$ 129,170
$ 60,160
Quarterly Output
14,480 pounds
22,400 pounds
5,600 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 product or
products should be processed further?
Required 1
Selling Price
$32.80 per pound
$ 27.80 per pound
$41.80 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
Product A Product B
Product C
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 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?
Sell at split-off point?
Process further?
Product A
Product B Product C
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