Exercise 12-7 Sell or Process Further Decisions (LO12-7) Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $330,000 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 A B C Selling Price $ 16.00 per pound $ 10.00 per pound $ 22.00 per gallon Quarterly Output 12,200 pounds 19, 100 pounds 3,400 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 seling prices after further processing are given below. Additional Product Processing Costs A $61,390 B $87,645 C $35,300 Selling Price $20.70 per pound $15.70 per pound $29.70 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 productor products should be processed further? Complete this question by entering your answers in the tabs below. Ps AI O RA o search PO, $35,300 Popesu $29.70 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? K Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 Required Required 2 > re to search o Ps AL POP $35,300 A. $29.70 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 productor products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 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? Product A Product B Product Sell at split-off point? Process further?
