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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 $91,000 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 $91,000 per quarter. 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 $ 5 per pound 11,000 pounds
B $ 6 per pound 16,000 pounds
C $ 12 per gallon 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 Additional Processing Costs Selling Price
A $ 37,000 $

8

per pound
B $ 36,000 $ 10 per pound
C $ 10,000 $ 16 per gallon

1.Compute the incremental profit (loss) for each product.

2.Which product or products should be sold at the split-off point?Product A Product B or Product C select all that apply

3.Which product or products should be processed further?Product A Product B or Product C select all that apply

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