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 Quarterly Output $ 24.00 per pound 13,800 pounds B $ 18.00 per pound 21,500 pounds $ 30.00 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: Additional Processing Product Costa Selling Price $ 81,150 $ 29.50 per pound $ 117,125 $ 24.50 per pound $ 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 productor products should be processed further? A B C Complete this question by entering your answers in the tabs below. Required Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the spilt-off point? (Enter "disadvantages" as a negative value) Product A Product B Product C Financial advantage (disadvantage) of further processing B $ 18.00 per pound 21,500 pounds $ 30.00 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: Additional Processing Product Costa Selling Price $ 81,150 $ 29.50 per pound $ 117,125 $ 24.50 per pound $ 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 of products should be sold at the split-off point and which productor products should be processed further? B Complete this question by entering your answers in the tabs below. ces Required 1 Requirds 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 Product B Product C Sell at split-off point? Process further? activity level OT 100,000 units per year is: Direct materials $ 2.00 Direct labor $ 4.00 Variable manufacturing overhead $ 0.80 Fixed manufacturing overhead $ 3.35 Variable selling and administrative expenses $ 1.20 Fixed selling and administrative expenses $ 3.00 The normal selling price is $24.00 per unit. The company's capacity is 127.200 units per year. An order has been received from a mail- order house for 1.700 units at a special price of $21.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1000 units of this product that were produced last year and that are interior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferlor units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? Complete this question by entering your answers in the tabs below. Required 1 Required 2 As a separate matter from the special order, assame the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model What unit cost is relevant for establishing a minimum selling price for the inferior units? (Round your answer to 2 decimal places) Show less Relevant cost per unit
