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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 produ-

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 produ-

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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Exercise 13-7 (Static) 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 $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 A B C Selling Price $ 16 per pound $8 per pound $ 25 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: 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? Complete this question by entering your answers in the tabs below.
Transcribed Image Text:Exercise 13-7 (Static) 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 $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 A B C Selling Price $ 16 per pound $8 per pound $ 25 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: 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? Complete this question by entering your answers in the tabs below.
Product ABC с 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? 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? (Enter "disadvantages" as a negative value.) Financial advantage (disadvantage) of further processing < Required 1 Product A Product B Required 2 > Product C
Transcribed Image Text:Product ABC с 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? 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? (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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