Sell or Process Further

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000 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	Selling Price	Quarterly Output
A	$25 per pound	14,000 pounds
B	$19 per pound	21,800 pounds
C	$31 per gallon	5,200 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:

Product	Additional Processing Cost	Selling Price
A	$83,800	$30.60 per pound
B	$121,080	$25.60 per pound
C	$55,280	$39.60 per gallon

What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? AND Based on your analysis, which product or products should be sold at the split-off point and which product or products should be processed further?