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  3. dorsey company manufactures three products from a

Dorsey Company manufactures three products from a common input in a joint processing...

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Accounting

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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 $90,000 per quarter. 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 S 3 per pound S 4 per pound S 13 per gallon 20,000 pounds 25,000 pounds 5,000 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 Additional ProductProcessing Costs S 42,000 S 37,000 S 11,500 Selling Price S 4 per pound S 6 per pound S 16 per gallon Required: a. Compute the incremental profit (loss) for each product. Product Product B Product Selling price after further processing Selling price at the split-off point Incremental revenue per pound or gallon Total quarterly output in pounds or gallons Total incremental revenue Total incremental processing costs Total incremental profit or loss

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