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 processingcosts up to the split-off point total $350,000 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 Selling Price $16 per pound $ 8 per pound $25 per gallon Quarterly Output 15,000 pounds 20,000 pounds 4,000 gallons Product 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 Processing Selling Price Product Costs $63,000 $80,000 $36,000 $ 20 per pound $ 13 per pound S 32 per gallon

Explanation / Answer

A B C Selling price after further processing 20 13 32 Selling price at the split-off point 16 8 25 Incremental revenue per pound or gallon 4 5 7 Total quarterly output in pounds or gallons 15000 20000 4000 Total incremental revenue 60000 100000 28000 Total incremental processing costs 63000 80000 36000 Total incremental profit or loss -3000 20000 -8000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

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