Req 1-2

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $385,000 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 Product Selling Price Output $27.00 per pound 14,400 pounds $21.00 per pound 22,400 pounds $33.00 per gallon 5,600 gallons 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! Product Additional Processing Costs $ 89,220 $129,170 $ 60, 160 Selling Price $32.80 por pound $27.80 per pound $41.80 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