Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Dorsey Company manufactures three products from a common input in ajoint processing operation. Joint processing costs up to the splitoff point total $375,000 per quarter.
Dorsey Company manufactures three products from a common input in ajoint processing operation. Joint processing costs up to the splitoff point total $375,000 per quarter. For financial reporting purposes, the company allocates these costs to thejoint products on the basis of their relative sales value at the splitoff point. Unit selling prices and total output at the splitoff point are as follows: Product Selling Price Quarterly Output A $ 25.00 per pound 14,000 pounds B at 19.00 per pound 21,800 pounds C $ 31.00 per gallon 5,200 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 Product Costs Selling Price A $ 83,800 $ 30.60 per pound B $ 121,080 $ 25.60 per pound C $ 55,280 $ 39.60 per gallon Required: 1. What is the nancial advantage (disadvantage) of further processing each of the three products beyond the splitoff point? 2. Based on your analysis in requirement 1, which product or products should be sold at the splitoff point and which product or products should be processed further
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started