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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 593,000 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 593,000 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 S 4 por pound S6 per pound S 11 por gallon Quarterly Output 15.000 pounds 20.000 pounds 6.000 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 S 40,000 S 38.000 S 14,500 Selling Price $ 5 per pourid $ & per pound $ 14 per gallon Required: a. Compute the incremental profit (loss) for each product. Product Product B Product C 0 0 0 Selling price after further processing Selling price at the solit-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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