Katrina Flatt Managerial Accounting: Acct 325 Face to Face Spring 2018 Prof Jeff
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Katrina Flatt
Managerial Accounting: Acct 325 Face to Face Spring 2018 Prof Jefferies - Web BB & Connect
Ch 12 Exercises
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Exercise 12-7 Sell or Process Further [LO12-7]
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $95,000 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:
4
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.)
rev: 07_08_2014_QC_51029, 11_12_2014_QC_56986, 11_14_2014_QC_56986, 11_27_2015_QC_CS-33744, 12_14_2015_QC_CS-33744, 04_17_2017_QC_CS-85287
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Ch 12 Exercises
instructions | helpExplanation / Answer
a Product A Product B Product C Selling price after further processing 4 7 11 Selling price at the split-off point 3 4 9 Incremental revenue per pound or gallon 1 3 2 Total quarterly output in pounds or gallons 19000 24000 7000 Total incremental revenue 19000 72000 14000 Total incremental processing costs 41000 40000 10000 Total incremental profit or loss -22000 32000 4000 b Product A should be sold at the split-off point c Product B and Product C should be processed further
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