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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint...

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Accounting

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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to t split-off point total $330,000 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 A B C Selling Price $ 16.00 per pound $ 10.00 per pound $ 22.00 per gallon Quarterly Output 12,200 pounds 19,100 pounds 3,400 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 Product Processing Costs $61,390 $87.545 $35,300 Selling Price $20.70 per pound $15.70 per pound $29.70 per gallon 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 product or products should be processed further

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