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C Dorsey Company manufactures three products from a common input in a joint processing operation, Joint processing costs up to the split-off point total $310,000
C Dorsey Company manufactures three products from a common input in a joint processing operation, Joint processing costs up to the split-off point total $310,000 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 Selling Price Quarterly Output $ 12.00 per pound 11, 400 pounds $ 6.00 per pound 17,900 pounds $ 18.00 per gallon 2,600 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: Additional Processing Product Costs Selling Price $ 52, 470 $ 16.30 per pound $ 74,345 $ 11.30 per pound c $ 27, 460 $ 25.30 per gallon B 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
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