EXERCISE 12-7 Sell or Process Further Decisions L012-7 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 per quarter. For financial reporting pur- poses, 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....... B..... C........... $16 per pound $8 per pound $25 per gallon 15,000 pounds 20,000 pounds 4,000 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......... B..... C................. $63,000 $80,000 $36,000 $20 per pound $13 per pound $32 per gallon Required: 1. What is the financial advantage (disadvantage of further processing each of the three prod- ucts 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