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Exercise 12-7 Sell or Process Further Decisions (LO12-7] Dorsey Company manufactures three products from a common input in a

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Product A Product B Product C
Selling Price after further processing $     21.80 $      16.80 $     30.80
Less: Selling Price at the split off point $     17.00 $      11.00 $     23.00
Incremental Revenue per pound or gallon $        4.80 $         5.80 $       7.80
Total quarterly output in pounds or gallons       12,400        19,400         3,600
Total Incremental Revenue (incremental revenue * output) $   59,520 $ 112,520 $   28,080
Total incremental processing costs $   63,720 $    91,120 $   37,360
Financial advantage (disadvantage) of further processing $   (4,200) $    21,400 $   (9,280)

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