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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 D C Selling Price $ 12.00 per pound $6.00 per pound i $18.00 per gallon Product 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 Processing Conta 52,470 $74,345 $ 27,460 Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons Selling Price $16.30 per pound $11.30 per pound 25.30 per gallon C 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? Required 11 Required 2 Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Product A Product D Financial advantage (disadvantage) of further processing Required Required 2 > Product C

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 D C Selling Price $ 12.00 per pound $6.00 per pound i $18.00 per gallon Product 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 Processing Conta 52,470 $74,345 $ 27,460 Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons Selling Price $16.30 per pound $11.30 per pound 25.30 per gallon C 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? Required 11 Required 2 Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Product A Product D Financial advantage (disadvantage) of further processing Required Required 2 > Product C

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...
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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 D C Product A B Selling Price $ 12.00 per pound $6.00 per pound s 18.00 per gallon 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. C Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons Additional Processing Cont $ 52,470 $74,345 $ 27,460 Selling Price $16.30 per pound $11.30 per pound $25.30 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? 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? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Product A Product B Financial advantage (disadvantage) of further processing Required 2 > Product C
Transcribed Image Text:Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 D C Product A B Selling Price $ 12.00 per pound $6.00 per pound s 18.00 per gallon 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. C Quarterly Output 11,400 pounds 17,900 pounds 2,600 gallons Additional Processing Cont $ 52,470 $74,345 $ 27,460 Selling Price $16.30 per pound $11.30 per pound $25.30 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? 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? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Product A Product B Financial advantage (disadvantage) of further processing Required 2 > Product C
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