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80383 Bookmarks Develop Window Help newconnect.mheducation.com Soundcloud Apple Your stream on SoundCloud Twitter ESPN Instagram Disney Apple Bing Google Yahoo Connect imperial Jewelers Manufactures And Sells A Gold Br.. I Ch Homework Assignment Help Save&Exit; Subr Check my work Exercise 12-7 Sell or Process Further Decisions [LO12-7] Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off polint total $315,000 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 A 13.00 per pound 11,600 pounds 7.00 per pound 18,200 pounds C s19.00 per galion 2.800 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 Processing Selling Price 0$17.40 per pound 77,580 12.40 per pound 26.40 per gallor $29,360 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 split-off point and which product or products should be processed further? Complete this question by entering your .nswers in the tabs below.

Explanation / Answer

1) Calculate financial advantage (disadvantage) of further processing :

Product A and Product C should be sold at split off point and product B should be sold after futher processing

Product A Product B Product C Sale after further processing 17.40 12.40 26.40 Sale after split off point 13 7 19 Incremental revenue per pound/gallon 4.40 5.40 7.40 Quantity 11600 18200 2800 Incremental revenue 51040 98280 20720 Less: Incremental cost (54640) (77580) (29360) Incremental profit (3600) 20700 (8640)

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