My Print Center hapter 12 Exercises6 Dorsey Company manufactures three products

Question

My Print Center hapter 12 Exercises6 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $385,000 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: Quarterly Output 14,480 pounds 22,400 pounds Product selling Price $ 27.9e per pound s 21.ee per pound $ 33.00 per gallon oints 5,69e 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 Selling Price Hint Additional Product Processing Costs s 89,22e $129,17e s 6e,16e $32.8e per pound $27.8e per pound $41.8e per galion Print Requlred 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? Re erences Complete this question by entering your answers in the tabs below. RequiredRequired 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Enter "disadvantages as a negative value.) Financial advantage (disadvantage) of further processing

Explanation / Answer

Solution:

1) Calculation of the Financial Advantage (Disadvantage) of Further Processing Each of the Three Products Beyond the Split-Off Point:

2) Based on the Requirement 1, which Product should be Sold at the split-Off Point and Which Product Should be Processed Further:

Product A and Product B Should be Sold at the Split-off Point. Product B Should be Processed Further.

Product A Product B Product B Selling price after further processing $32.80 $27.80 $41.80 Selling price at the split-off point $27.00 $21.00 $33.00 Incremental revenue per pound or gallon $5.80 $6.80 $8.80 Total quarterly output in pounds or gallons 14,400 22,400 5,600 Total incremental revenue $83,520 $152,320 $49,280 Total incremental processing costs $89,220 $129,170 $60,160 Total incremental profit or loss ($5,700) $23,150 ($10,880)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.