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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 $335,000 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 $335,000 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 A $ 17.00 per pound 12,400 pounds B $ 11.00 Pound $23.00 petion 19,400 pounds 3,600 gallons 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: Product Additional Processing Costs $63,720 $91, 120 $37,360 Selling Price $21.89 per pound $16.80p pound 80 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 product or products should be processed further? Complete this question by entering your answers in the tabs below. Required Required 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 Product B C Financial advantage (disadvantage) of further processing Required 1 Required 2 > Required Required 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 Product Product Sell at split-off point? Process further?
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