Chapter 11, Problem 7E

Sell or Process Further Decisions
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 it the split-off point. Unit selling prices and total output at the split-off point are as follows:

Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and imit selling prices after further processing are given below:

Required:
What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-oil point
2. Based on 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?