Exercise $11-7$ Sell or Process Further Decisions $[$LO$11-7]$

Dorsey Company manufactures three products from a common Input in a joint processing operation. Joint processing costs up to the split$-$off point total $$355,000$ per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of thelr relative sales value at the split$-$off point. Unit selling prices and total output at the split$-$off point are as follows:

$\backslash$table$[[$Braduct$,$Selling Price,$\backslash$table$[[$Quarterly$],[$output$]]],[4,$$$21\mathrm{.}00$ per pound,$13,200$ pounds$],[8,$$$15\mathrm{.}00$ per pound,$20,600$ pounds$],[$C$,$$$27\mathrm{.}09$ per gallon,$4,400$ 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:

$\backslash$table$[[$Pimoduct$,\backslash$table$[[$Additional$],[$Processing Cosits$]],\backslash$table$[[$Selling$],[$Price$]]],[$A$,13,440,$$$26\mathrm{.}20$ per pound$],[$B$,,$$$21\mathrm{.}20$ per pound$],[$C$,46,900,$$$35\mathrm{.}28$ per gallon$]]$

Requlred:

What is the financial advantage $($disadvantage$)$ of further processing each of the three products beyond the split$-$off point?

Based on your analysis in requlrement $1.$ which product or products should be sold at the split$-$off polnt and which product or products should be processed further?

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

What is the financial adventage $($disadvantage$)$ of further processing each of the three products beyond the split$-$off point?

Finaneial abvantsge $($alisachantage of fumer processing

Product $A$

Produet B

Produet $C$