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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 $350,000

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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 $350,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products o 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 ABC Selling Price $ 20.00 per pound $ 14.00 per pound $ 26.00 per gallon Quarterly Output 13,000 pounds 20,300 pounds 4,200 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 Costs $ 70,950 Selling Price $ 25.10 per pound Product A B $ 101,905 $ 43,780 $ 34.10 per gallon $ 20.10 per pound 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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