Exercise 13-7 (Algo) 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 $365,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Selling Price Quarterly Output 13,600 pounds Product A $ 23.00 per pound B $ 17.00 per pound 21,200 pounds C $ 29.00 per gallon 4,800 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: Additional Processing Costs $ 78,540 Selling Price $ 28.40 per pound Product A B $ 113,230 C $ 50,560 $ 37.40 per gallon $ 23.40 per pound 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 should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2
Exercise 13-7 (Algo) 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 $365,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Selling Price Quarterly Output 13,600 pounds Product A $ 23.00 per pound B $ 17.00 per pound 21,200 pounds C $ 29.00 per gallon 4,800 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: Additional Processing Costs $ 78,540 Selling Price $ 28.40 per pound Product A B $ 113,230 C $ 50,560 $ 37.40 per gallon $ 23.40 per pound 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 should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 13-7 (Algo) 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 $365,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products
based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
Selling Price
Quarterly Output
13,600 pounds
Product
A
$ 23.00 per pound
B
$ 17.00 per pound
21,200 pounds
C
$ 29.00 per gallon
4,800 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:
Additional
Processing
Costs
$ 78,540
Selling Price
$ 28.40 per pound
Product
A
B
$ 113,230
C
$ 50,560
$ 37.40 per gallon
$ 23.40 per pound
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 should be
processed further?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff6d147c8-a2e1-4f7b-a8c3-4e730efbba73%2F5d7eb19e-36da-4155-baa4-bfc53625fcbb%2Fmve7q2e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 13-7 (Algo) 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 $365,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products
based on their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
Selling Price
Quarterly Output
13,600 pounds
Product
A
$ 23.00 per pound
B
$ 17.00 per pound
21,200 pounds
C
$ 29.00 per gallon
4,800 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:
Additional
Processing
Costs
$ 78,540
Selling Price
$ 28.40 per pound
Product
A
B
$ 113,230
C
$ 50,560
$ 37.40 per gallon
$ 23.40 per pound
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 should be
processed further?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
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