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 at the split$-$off point. Unit selling prices and total output at the split$-$off point are as follows:

Product Selling Price Quarterly Output

A $ $16$ per pound $15,000$ pounds

B $ $8$ per pound $20,000$ pounds

C $ $25$ per gallon $4,000$ 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:

Product Additional Processing Costs Selling Price

A $ $63,000$ $ $20$ per pound

B $ $80,000$ $ $13$ per pound

C $ $36,000$ $ $32$ 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?