hapter 12 Homework Saved Help Save & Exit Submit Check my work 3 Dorsey Company
ID: 2405187 • Letter: H
Question
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 >Explanation / Answer
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
_______________________________________________________________________
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
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.