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 $340,000 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 Selling Price $18.00 per pound $ 12.00 per pound $24.00 per gallon Product A B с 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 $ 66,090 $ 94,655 $ 39,460 Quarterly Output 12,600 pounds 19,700 pounds 3,800 gallons Selling Price $ 22.90 per pound $17.90 per pound $31.90 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. Required 1 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. Product A Product B Product C Financial advantage (disadvantage) of further processing Required 1 Required 2 Sell at split-off point? Process further? 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? Product A Product B Product C
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 $340,000 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 Selling Price $18.00 per pound $ 12.00 per pound $24.00 per gallon Product A B с 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 $ 66,090 $ 94,655 $ 39,460 Quarterly Output 12,600 pounds 19,700 pounds 3,800 gallons Selling Price $ 22.90 per pound $17.90 per pound $31.90 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. Required 1 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. Product A Product B Product C Financial advantage (disadvantage) of further processing Required 1 Required 2 Sell at split-off point? Process further? 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? Product A Product B Product C
Chapter1: Financial Statements And Business Decisions
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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 $340,000 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
Selling Price
$ 18.00 per pound
$ 12.00 per pound
$24.00 per gallon
Product
A
B
с
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
$ 66,090
$ 94,655
$ 39,460
Quarterly Output
12,600 pounds
19,700 pounds
3,800 gallons
Selling Price
$ 22.90 per pound
$17.90 per pound
$31.90 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.
Required 1 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.
Product A Product B
Financial advantage (disadvantage) of further processing
Required 1 Required 2
Sell at split-off point?
Process further?
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?
Product A
Product B
Product C
Product C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3194c964-ded2-4c68-a655-199d3f3d1172%2Fa5fce6aa-d6e1-4f41-9834-673e08b59e59%2Fiimdfi_processed.jpeg&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 $340,000 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
Selling Price
$ 18.00 per pound
$ 12.00 per pound
$24.00 per gallon
Product
A
B
с
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
$ 66,090
$ 94,655
$ 39,460
Quarterly Output
12,600 pounds
19,700 pounds
3,800 gallons
Selling Price
$ 22.90 per pound
$17.90 per pound
$31.90 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.
Required 1 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.
Product A Product B
Financial advantage (disadvantage) of further processing
Required 1 Required 2
Sell at split-off point?
Process further?
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?
Product A
Product B
Product C
Product C
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