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 $92,000 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 $92,000 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 $ 3 per pound 20,000 pounds
B $ 4 per pound 25,000 pounds
C $ 9 per gallon 7,000 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 $ 43,000 $ 4 per pound
B $ 37,000 $ 6 per pound
C $ 11,250 $ 11 per gallon
b.Which product or products should be processed further? A,B,C OR ALL |
Which product or products should be sold at the split-off point? A,B,C OR ALL
|
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