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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 $390,000 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 $390,000 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. Unlt selling prices and total output at the split-off point are as follows: Quarterly Product Selling Price Output $28.00 per pound 14,600 pounds $ 22.00 per pound 22,700 pounds $34.00 per gallon 5,800 gallons A B C 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 Selling Product Processing Costs Price $91,990 $33.90 per pound $133,305 $28.90 per pound $ 62,660 $42.90 per gallon A 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? What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Enter disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing 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 Products Product Sell at spit off point? Process further
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