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 A B Selling Price $ 16 per pound $ 8 per pound $ 25 per gallon Quarterly Output 15,000 pounds 20,000 pounds 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: Additional Processing Selling Product Costs Price $63,000 $20 per pound $80,000 $13 per pound $36,000 $32 per gallon A 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Product A Product B Product C Financial advantage (disadvantage) of further processing Pad25 split-off point total $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products 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 B Selling Price $ 16 per pound $ 8 per pound $ 25 per gallon Quarterly Output 15,000 pounds 20,000 pounds 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 A B Additional Processing Costs $63,000 $80,000 $36,000 Selling Price $20 per pound $13 per pound $32 per gallon 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? Complete this question by entering your answers in the tabs below. Required 1 Required 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? Product A Product B Product C Sell at split-off point? Process further
