Dorsey Company manufactures three products from a common inputin a joint processing operation. Joint processing costs up to thesplit-off point total $91,000 per quarter. The company allocatesthese costs to the joint products on the basis of their relativesales value at the split-off point. Unit selling prices and totaloutput at the split-off point are as follows:
Product Selling Price Quarterly Output A $3 per pound 19,000 pounds B $4 per pound 24,000 pounds C $11 per gallon 6,000 gallons
Each product can be processed further after thesplit-off point. Additional processing requires no specialfacilities. The additional processing costs (per quarter) and unitselling prices after further processing are given below:
Product Additional Processing Costs Selling Price A $40,000 $4 per pound B $38,000 $7 per pound C $14,250 $14 per gallon
Required:
Compute the incremental profit (loss) for each product.
Product A
Product B
Product C
Selling price after further processing
Selling price at the split-off point
Incremental revenue per pound or gallon
Total quarterly output in pounds or gallons
Total incremental revenue
Total incremental processing costs
Total incremental profit or loss
Which product or products should be sold at the split-offpoint?
Product A
Product B
Product C
Which product or products should be processed further? (You mayselect more than one answer.
Product A
Product B
Product C
Dorsey Company manufactures three products from a common inputin a joint processing operation. Joint processing costs up to thesplit-off point total $91,000 per quarter. The company allocatesthese costs to the joint products on the basis of their relativesales value at the split-off point. Unit selling prices and totaloutput at the split-off point are as follows:
| Product | Selling Price | Quarterly Output |
| A | $3 per pound | 19,000 pounds |
| B | $4 per pound | 24,000 pounds |
| C | $11 per gallon | 6,000 gallons |
Each product can be processed further after thesplit-off point. Additional processing requires no specialfacilities. The additional processing costs (per quarter) and unitselling prices after further processing are given below:
| Product | Additional Processing Costs | Selling Price |
| A | $40,000 | $4 per pound |
| B | $38,000 | $7 per pound |
| C | $14,250 | $14 per gallon |
Required:
Compute the incremental profit (loss) for each product.
Product A | Product B | Product C | |
Selling price after further processing | |||
Selling price at the split-off point | |||
Incremental revenue per pound or gallon | |||
Total quarterly output in pounds or gallons | |||
Total incremental revenue | |||
Total incremental processing costs | |||
Total incremental profit or loss |
Which product or products should be sold at the split-offpoint?
Product A
Product B
Product C
Which product or products should be processed further? (You mayselect more than one answer.
Product A
Product B
Product C
Related questions
Dorsey Company manufactures three products from a common input in ajoint processing operation. Joint processing costs up to thesplit-off point total $335,000 per quarter. The company allocatesthese costs to the joint products on the basis of their relativesales value at the split-off point. Unit selling prices and totaloutput at the split-off point are as follows: |
| Product | Selling Price | Quarterly Output |
| A | $17 per pound | 13,900 pounds |
| B | $7 per pound | 19,500 pounds |
| C | $27 per gallon | 2,200 gallons |
Each product can be processed further after the split-off point.Additional processing requires no special facilities. Theadditional processing costs (per quarter) and unit selling pricesafter further processing are given below: |
| Product | Additional Processing Costs | Selling Price |
| A | $64,300 | $19 per pound |
| B | $82,000 | $14 per pound |
| C | $36,700 | $31 per gallon |
| Required: | |
| (a) | Compute the incremental profit (loss) for each product. (Negative amounts should be indicated by a minus sign. Omit the "$"sign in your response.) |
| Product A | Product B | Product C | |
| Incremental profit (loss) | $ | $ | $ |
| (b) |
| Which product or products be sold at the split-off point? (Select all that apply.) |
| Product A | |
| Product B | |
| Product C |
