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Connect × connect .> C Secure Ht CSecure https//newconnect.mheducation.com/flow/connect.html AppsHaku Drive Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 7 Exercise 12-7 Sell or Process Further Decisions [L012-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $350,000 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: points Quarterly Output 15,000 pounds 28,008 pounds 4,00 allons Product Selling Price A $16 per pound B per pound C25 per gallon 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 Costs $63,000 $88,008 $36,008 Selling Price $20 per pound $13 per pound $32 per gallon Product Required: Mc Hill O Type here to search 2-12 PM 4/4/2018

Explanation / Answer

1) Calculate financial advantage after further processing :

b)

Product A Product B Product C Sales price after further processing 20 13 32 Sale price at split off point 16 8 25 Incremental price after further processing 4 5 7 Quantity 15000 20000 4000 Incremental revenue after further processing 60000 100000 28000 Less: Additional cost -63000 -80000 -36000 Incremental profit (loss) -3000 20000 -8000

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