Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please explain Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total
please explain
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $325,000 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 C Selling Price $15.00 per pound $ 9.00 per pound $ 21.00 per gallon Quarterly Output 12,000 pounds 18,808 pounds 3,200 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: Additional Product Processing Costs $59,160 $84,230 $33,280 Selling Price $19.68 per pound $14.60 per pound $28.60 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 furtherStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started