Dorsey Company manufactures three products from a common input in a joint proces

Question

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $99,000 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:

     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:

5

Compute the incremental profit (loss) for each product.

Which product or products should be sold at the split-off point? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.)

Which product or products should be processed further? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.)

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $99,000 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:

Explanation / Answer

Compute the incremental profit (loss) for each product. Product If Sold At Split Off If Processed Further Calculation of Incremental Profit/Loss Selling Price At Split off Cost at Split Off Profit Loss at Split Off Selling Price of Processed Product Further Processing Cost Cost At Split Off Profits from Sale Incremental Revenue Incremental Cost Incremental Profit/( Loss) A 60000 27000 33000 75000 37000 27000 11000 15000 37000 -22000 B 100000 45000 55000 160000 39000 45000 76000 60000 39000 21000 C 60000 27000 33000 80000 11000 27000 42000 20000 11000 9000 TOTAL 220000 99000 121000 315000 87000 99000 129000 95000 87000 8000 Which product or products should be sold at the split-off point? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Product A Should be sold Product B NO Product C NO Which product or products should be processed further? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Product A NO Product B Should be Processed Product C Should be Processed

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