Question
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $93,000 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 $93,000 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:
ProductSelling PriceQuarterly Output
A$4 per pound13,000 pounds
B$5 per pound18,000 pounds
C$9 per gallon7,000 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:
ProductAdditional Processing CostsSelling Price
A$41,000$6 per pound
B$37,000$9 per pound
C$12,000$11 per gallon
What is the incremental profit/loss(for the following) for product a, product b, and product c?
Product AProduct BProduct C
Selling price after further processing________________________
Selling price at the split-off point________________________
Incremental revenue per pound or gallon________________________
Total quarterly output in pounds or gallons________________________
Total incremental revenue________________________
Total incremental processing costs________________________
Total incremental profit or loss________________________
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