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Dorsey Company manufactures three products from a common input in a joint processing operation Joint processing costs up to t

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Answer #1

Answer:-1)-The financial disadvantages of processing Product A beyond the split-off point is= $4500.

The financial advantages of processing Product B beyond the split-off point is=$21750.

The financial disadvantages of processing Product C beyond the split-off point is=9600.

Explanation-

Doresy Company
Statement Of Incremental Profit/(loss)
Product Sale value at Split-Off-Point Sale value of processed product Incremental sale Cost to further process Incremental profit/(loss)
$ $ $ $ $
(a) (b) (c=b-a) (d) (e=c-d)
A 12800 pounds*$19 per pound =$243200 12800 pounds*$24 per pound =$307200 64000 68500 -4500
B 20000 pounds*$13 per pound =$260000 20000 pounds*$19 per pound =$380000 120000 98250 21750
C 4000 gallons*$25 per gallon = $100000 4000 gallons*$33 per gallon = $132000 32000 41600 -9600

2)-Product A & C should be sold at split-off point and product B should be processed further.

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