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Please explains and show calculations. Thank you. Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up
Please explains and show calculations. Thank you.
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $320,000 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: Quarterly output 11,800 pounds 18,580 pounds 3,000 gallons lling Price Product A 14.08 per pound B 8.00 per pound $20.00 per gallon 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 Selling Price Additional Product Processing Costs $18.50 per pound $13.50 per pound $27.5e per gallon $56,858 $80,875 $31,300 Required 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the splt-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
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