What is the financial advantage of further processing

Assignment Help Accounting Basics

Reference no: EM133659657

Question: Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $365,000 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 $ 23.00 per pound 13,600 pounds
B $ 17.00 per pound 21,200 pounds
C $ 29.00 per gallon 4,800 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:

Product Additional Processing Costs Selling Price
A $ 78,540 $ 28.40 per pound
B $ 113,230 $ 23.40 per pound
C $ 50,560 $ 37.40 per gallon

Required:

What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?

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?

Reference no: EM133659657

Questions Cloud

Determine the impact of the transaction : Determine the impact of the transaction below on the Stockholder's Equity category of the Accounting Equation. Transaction: SCS majority shareholder

What will be the consequence if the government sets a limit : What will be the consequence if the government sets a limit on credit card interest rates that is above the market equilibrium?

Comparison to the value of the stock : Comparison to the value of the stock, the value of stock exchanged for property must be no less than % of the value of the services provided

Pursuing achievement is positive thing to undertake : When it does not cause harm to other people, pursuing achievement is a positive thing to undertake.

What is the financial advantage of further processing : What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point?

What will happen to the number of firms in the market : The figure below depicts short-run market equilibrium in a perfectly competitive market. What will happen to the number of firms in this market in the long run?

Exception of the company inventories : David's inventories on January 1, 2022 were estimated to have a fair value that was $16,000 higher than their book value

Research the arguments for and against free trade : Research the arguments for and against Free Trade and decide which side of the argument you find yourself supporting. Write statement to describe your position.

Determine depreciation ex- pense for all fixed assets : Since the software was placed into service close to the beginning of the month, you decide to go ahead and take a full month of depreciation for January

User Account

All Pages