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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $370,000 per
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $370,000 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 $24.00 per pound A B $ 18.00 per pound C $ 30.00 per gallon Quarterly Output 13,800 pounds 21,500 pounds 5,000 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 C Required: Additional Processing Costs $ 81,150 $117,125 $ 52,900 Selling Price $ 29.50 per pound $ 24.50 per pound $ 38.50 per gallon 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? Product A Additional Processing Costs B $ 81,150 $117,125 Selling Price $29.50 per pound $24.50 per pound C $ 52,900 $ 38.50 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? Answer is complete but not entirely correct. 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? (Enter "disfdvantages" as a negative value.) Financial advantage (disadvantage) of further processing. Product A 75,900 Product B Product C $ 139,750 $ 42,500 Required 1 Required 2 >
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