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5 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000
5 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000 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: 20 points Product Selling Price Quarterly Output A 25.00 per pound 14, 000 pounds 19.00 per pound 21,800 pounds Qwo $ 31.00 per gallon 5,200 gallons eBook 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 Hint Processing Product Costs Selling Price A $ 83, 800 $ 30. 60 per pound $ 121, 080 25. 60 per pound Qw Print $ 55 , 280 $ 39.60 per gallon Required: References 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
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