Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $330,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product B C Product Selling Price $ 16.00 per pound $ 10.00 per pound $22.00 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: B с Additional Processing Costs $ 61,390 $ 87,645 $ 35,300 Quarterly Output 12,200 pounds 19,100 pounds 3,400 gallons 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 should be processed further? Required 1 Selling Price $ 20.70 per pound $15.70 per pound $29.70 per gallon Complete this question by entering your answers in the tabs below. 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. Financial advantage (disadvantage) of further processing < Required 1 Product A Product B 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 $330,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product B C Product Selling Price $ 16.00 per pound $ 10.00 per pound $22.00 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: B с Additional Processing Costs $ 61,390 $ 87,645 $ 35,300 Quarterly Output 12,200 pounds 19,100 pounds 3,400 gallons 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 should be processed further? Required 1 Selling Price $ 20.70 per pound $15.70 per pound $29.70 per gallon Complete this question by entering your answers in the tabs below. 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. Financial advantage (disadvantage) of further processing < Required 1 Product A Product B Required 2 > Product C
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which should be
processed further?
Sell at split-off point?
Process further?
Product A
Product B
< Required 1
Product C
Required 2
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 $330,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products
based on 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
B
с
Selling Price
$16.00 per pound
$ 10.00 per pound
$22.00 per gallon
Product
A
B
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:
Additional
Processing
Costs
$ 61,390
$ 87,645
$ 35,300
Quarterly Output
12,200 pounds
19,100 pounds
3,400 gallons
Required 1
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 should be
processed further?
Selling Price
$20.70 per pound
$15.70 per pound
$29.70 per gallon
Complete this question by entering your answers in the tabs below.
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.
Financial advantage (disadvantage) of further processing
< Required 1
Product A Product B
Required 2 >
Product C
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