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)
v:02-12-2011Which product or products be sold at the split-off point? (Select all that apply.)
Product A Product B Product C
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 |
Related questions
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
