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. 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:

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:

Required:

Which product or products should be sold at the split-off point and which product or products should be processed further? Show computations.

Transcribed Image Text:

Quarterly Product Selling Price Output $16 per pound S8 per pound 15,000 pounds A B 20,000 pounds $25 per gallon 4,000 gallons