Financial Reporting Purposes Assignment


Financial Reporting Purposes Assignment

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total of $310,000 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 ProductSelling Price $12.00 Der pound 11,400 pounds A $ 6.00 Der pound 17,900 pounds $18.00 Per gallon C 2,600 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 Processing Selling Product Price Costs $16.30 Per pound A $52,470 $11.30 Per pound $ 74,345 B $25.30 Per gallon $27,460 C 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? Complete this question by entering your answers in the tabs below. Required 1

2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Product A Product B Product Financial advantage (disadvantage) of further processing Required 2 Required 1 Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 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 Product Selling Price $12.00 per pound 11,400 pounds $6.00 per pound 17,900 pounds $18.00 per gallon 2,600 gallons C 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 Selling Price Processing Product Costs $16.30 per pound A $52,470 $11.30 per pound $74,345 $25,30 Per gallon C $27,460 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? Complete this question by entering your answers in the tabs below. Required Required 1 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? Product B Product C Product A Sell at a split-off point? Process further? Required 1 Required 2>. Get Accounting homework help today

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