Exercise 13-7 (Static) Sell or Process Further Decisions [LO13-7] Dorsey Company manufactures three products from a...

Transcribed Image Text:

Exercise 13-7 (Static) Sell or Process Further Decisions [LO13-7] 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: Product Selling Price A $ 16 per pound B $ 8 per pound C Quarterly Output 15,000 pounds $25 per gallon 20,000 pounds 4,000 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: Product Additional Processing Costs Selling Price A $ 63,000 $ 20 per pound B $ 80,000 $ 13 per pound $ 36,000 $ 32 per gallon 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 answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point (Enter "disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing < Required 1 Required 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which produc products should be processed further? Sell at split-off point? Process further? Product A Product B Product C < Required 1 Required 2 > Exercise 13-7 (Static) Sell or Process Further Decisions [LO13-7] 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: Product Selling Price A $ 16 per pound B $ 8 per pound C Quarterly Output 15,000 pounds $25 per gallon 20,000 pounds 4,000 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: Product Additional Processing Costs Selling Price A $ 63,000 $ 20 per pound B $ 80,000 $ 13 per pound $ 36,000 $ 32 per gallon 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 answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point (Enter "disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing < Required 1 Required 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which produc products should be processed further? Sell at split-off point? Process further? Product A Product B Product C < Required 1 Required 2 >