60.1K

Verified Solution

Link Copied!

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 B Selling Price $ 12.00 per pound $ 6.00 per pound $ 18.ee per gallon Quarterly Output 11,400 pounds 17,900 pounds 2,600 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 Selling Product Processing Costs Price $52,470 $16.30 per pound $74,345 $11.30 per pound $27,460 $25.30 per gallon A B 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 productor products should be processed further? 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? Product A Product B Product C Sell at split-off point? Process further

Answer & Explanation Solved by verified expert

See Answer