hapter 12 Homework Saved Help Save Exit Submit Check my wor

hapter 12 Homework Saved Help Save & Exit Submit Check my work 3 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $390,000 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: 50 points Quarterly output Product Selling Price A 28.00 per pound 14,600 pounds 22,700 pounds B 22.00 per pound $34.00 per gallon Book C 5,800 gallons Hint References processing costs (per quarter) and unit selling prices after further processing ree requires no special facilities. The additional Additional Processing Selling Price $33.90 per pound $28.90 per pound $42.90 per gallor Costs $ 91,990 05 62,660 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 splilt-off point and which product or products should be processed further? Complete this question by entering your answers in the tabs below Next >

Solution

Answer:

1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?

Dorsee company

Incremental Analyses

A

B

C

Selling price after further processing

33.9

28.9

42.9

Less:

Selling price at split off

28

22

34

Incremental Revenue

5.9

6.9

8.9

Multiplied by

Total Quarterly output

14600

22700

5800

Total Incremental Revenue

86140

156630

51620

Less:

Total Incremental Processing cost

91990

133305

62660

Total Incremental Profit or loss

-5850

23325

-11040

As we can see from the above table that product A and C has Incremental loss after frther processing

Only product B has Incremental Profit after further processing

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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?

Answer:

Based on your analysis in requirement 1,Product -A and product C should   sold at the split-off point and Product -B should   be processed further

Dorsee company
Incremental Analyses
	A	B	C
Selling price after further processing	33.9	28.9	42.9
Less:
Selling price at split off	28	22	34
Incremental Revenue	5.9	6.9	8.9
Multiplied by
Total Quarterly output	14600	22700	5800
Total Incremental Revenue	86140	156630	51620
Less:
Total Incremental Processing cost	91990	133305	62660
Total Incremental Profit or loss	-5850	23325	-11040