$10$

Exercise $11-7($Algo$)$ Sell or Process Further Decisions $[$LO$11-7]$

$0\mathrm{.}9$ points

References

References

References

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split$-$off point total $$380,000$ 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:

$\backslash$table$[[$Product$,$Selling Price,Quarterly Output$],[$A$,$$$26\mathrm{.}00$ per pound,$14,200$ pounds$],[$B$,$$$20\mathrm{.}00$ per pound,$22,100$ pounds$],[$C$,$$$32\mathrm{.}00$ per gallon,$5,400$ gallons$]]$

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:

$\backslash$table$[[,\backslash$table$[[$Additional$],[$Processing$],[$Costs$]]$ Selling Price$]]$

A $$86,490$$$31\mathrm{.}70$ per pound

B $$125,095$$$26\mathrm{.}70$ per pound

C $$57,700$$$40\mathrm{.}70$ per gallon

Required:

What is the financial advantage $($disadvantage$)$ of further processing each of the three products beyond the split$-$off point?

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.

What is the financial advantage $($disadvantage$)$ of further processing each of the three products beyond the split$-$off point?

$($Do not round your intermediate calculations. Enter "disadvantages" as a negative value.$)$

$\backslash$table$[[$Financial advantage $($disadvantage$)$ of further processing,Product $A,$Product B$,$Product $C$