Product A B с Product A Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additiona processing costs (per quarter) and unit selling prices after further processing are given below: ABC $ Selling Price 13.00 per pound $ 7.00 per pound $19.00 per gallon с Quarterly Output 11,600 pounds 18,200 pounds 2,800 gallons Additional Processing Costs $ 54,640 $ 77,580 $ 29,360 Selling Price $ 17.40 per pound $ 12.40 per pound $26.40 per gallon
Product A B с Product A Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additiona processing costs (per quarter) and unit selling prices after further processing are given below: ABC $ Selling Price 13.00 per pound $ 7.00 per pound $19.00 per gallon с Quarterly Output 11,600 pounds 18,200 pounds 2,800 gallons Additional Processing Costs $ 54,640 $ 77,580 $ 29,360 Selling Price $ 17.40 per pound $ 12.40 per pound $26.40 per gallon
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...
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Question
![Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
split-off point total $315,000 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
$13.00 per pound
$ 7.00 per pound
$19.00 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
Quarterly Output
11,600 pounds
18,200 pounds
2,800 gallons
$ 54,640
$ 77,580
$ 29,360
Selling Price
$17.40 per pound
$ 12.40 per pound.
$26.40 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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1fb77d1-c752-4653-8f65-d5ebd4ec27ec%2F30b6ccc0-52c1-4665-95c5-0db093390eaf%2F18vkx8m_processed.png&w=3840&q=75)
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 $315,000 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
$13.00 per pound
$ 7.00 per pound
$19.00 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
Quarterly Output
11,600 pounds
18,200 pounds
2,800 gallons
$ 54,640
$ 77,580
$ 29,360
Selling Price
$17.40 per pound
$ 12.40 per pound.
$26.40 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?
![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
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
Sell at split-off point?
Process further?
Product C
< Required 1
Required 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1fb77d1-c752-4653-8f65-d5ebd4ec27ec%2F30b6ccc0-52c1-4665-95c5-0db093390eaf%2Fb02op0h_processed.png&w=3840&q=75)
Transcribed Image Text: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
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
Sell at split-off point?
Process further?
Product C
< Required 1
Required 2
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