ANSWER OR NO RATE!! Dorsey Company manufactures three products from a common input in...
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ANSWER OR NO RATE!!
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $360,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products or 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: 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: 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. What is the financial advantage (disadvantage) of further processing each of the three products 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? Futura Company purchases the 70,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $11.50 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.50 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $112,000 ) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $84,000 per period. Depreciation is due to obsolescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of making the 70,000 starters instead of buying them from an outside supplier
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