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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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $385,000 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 $ 27.00 per pound 14,400 pounds B $ 21.00 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 $385,000 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 $ 27.00 per pound $ 21.00 per pound $ 33.00 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 $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: Quarterly Output 14,000 pounds 21,800 pounds 5,200 gallons Product Selling Price 25.00 per pound $19.00 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 $315,000 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 $ 13.00 per pound 11,600 pounds B $ 7.00 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 $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 Selling Price Quarterly Output A $ 25.00 per pound 14,000 pounds B $ 19.00 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 $315,000 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 $ 13.00 per pound 11,600 pounds B $ 7.00 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 $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 $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: Product Selling Price Quarterly Output A $ 22.00 per pound 13,400 pounds B $ 16.00 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 $340,000 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: Each product can be processed further after the split-off point. Additional processing requires no special facilities....