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8/22/2020 Assignment Print View

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6. Award: 8.00 points

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $365,000 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 Selling Price Quarterly Output

A $ 23.00 per pound 13,600 pounds B $ 17.00 per pound 21,200 pounds C $ 29.00 per gallon 4,800 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:

Product Additional

Processing Costs Selling Price

A $ 78,540 $28.40 per pound B $113,230 $23.40 per pound C $ 50,560 $37.40 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?

 Required 1 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?

Required 1 Required 2

Product A Product B Product C

Financial advantage (disadvantage) of further processing

rev: 04_16_2019_QC_CS-166161

References

Worksheet Difficulty: 1 Easy Learning Objective: 11-07 Prepare an analysis showing whether joint products should be sold at the split-off point or processed further.