Joint cost incurred upto the split off point is a sunk cost and hence not relevant | |||
The product should be processed further if the revenue after processing exceeds the revenue before processing and additional processing costs | |||
A | B | ||
Revenue after processing | 132,000 | 180,000 | |
Revenue before processing | 120,000 | 150,000 | |
Additional Processing costs | 10,000 | 12,000 | |
Net Benefit of processing | 2,000 | 18,000 | |
Both products should be processed further | |||
Dollar impact is $2000 for A and $18000 for B | |||
The products will be produced in the order of contribution margin per unit of constrained resource | |||
M | N | ||
Contribution Margin per Unit | 8 | 9 | |
Labor hours per unit | 2 | 3 | |
Contribution Margin per hour | 4 | 3 | |
Hence, M will be produced first | |||
Optimal Mix | |||
Product | Units | Hours per Unit | Total Hours |
M | 8000 | 2 | 16000 |
N | 5000 | 3 | 15000 |
31000 |
Part 3 contains 2 Decision making recommendations that are independent of each other. Covers material in...
Part 2 contains 3 Decision making recommendations that are independent of each other. Covers material in Module 17 Glass company manufactures glasses that it sells to mail-order distributors. Sales price per pair of glasses: $62 Manufacturing and other costs follow: Variable Cost per unit Direct Materials $13 Direct labor 12 Factory overhead 2 Distribution 3 Total Variable costs $30 Fixed costs per month Factory overhead $20,000 Selling and Administrative 10,000 Total Fixed costs $30,000 Current monthly production and sales volume...
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 Quarterly Output A $ 16 per pound 15,000 pounds B $ 8 per...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $330,000 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 peices and total output at the split-off point are as follows: Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing...
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 $ 16 per pound B $ 8 per pound C $ 25 per...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $305,000 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 $ 11.00 per pound $ 5.00 per pound $ 17.00 per gallon Quarterly...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $300,000 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 $ 10.00 per pound $ 4.00 per pound $ 16.00 per gallon Quarterly...
Dorsey company... Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $360,000 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 Product A Selling Price $ 22.00 per pound $ 16.00 per pound $...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to t split-off point total $375,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products 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 $ 25.00 per pound $ 19.00 per pound $ 31.00 per gallon Quarterly Output...
Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $325,000 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 Quarterly Output 12,000 pounds 18,800 pounds 3,200 gallons Selling Price $ 15.00 per pound $...
Sell or Process Further Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000 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 A B С Selling Price $25 per pound $19 per pound...