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Gennadij [26K]
3 years ago
7

Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the

split-off point total $350,000 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 $ 16 per pound 15,000 pounds B $ 8 per pound 20,000 pounds C $ 25 per gallon 4,000 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 $ 63,000 $ 20 per pound B $ 80,000 $ 13 per pound C $ 36,000 $ 32 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?
Business
1 answer:
Eduardwww [97]3 years ago
3 0

Answer:

Split-off point:

The split-off point is the point at which products from the joint process appear and are identified.  The costs which are incurred up to the split-off point are called joint costs and the costs that are incurred after the split-off point are called as

Separable costs. Some joint products which emerge from joint process can be sold at the split-off point or some products can be put to further processing.

Compute the profit or loss from the three products as shown below'

Description                                                              A               B               C

Selling price after further processing                    20              13              32

Selling price at the split off point                            16               8        25

Incremental revenue per pound or gallon             4               5         7

Total quarterly output in pounds or gallons     $15,000    $20,000    $4,000

Total incremental revenue                              $60,000   $100,000  $28,000

Total incremental processing costs              $63,000   $80,000  $36,000

Total incremental profit or (loss)                       ($3,000) $20,000  ($8,000)

Therefore the products A and C are need to be sold at the split off point and he product B should be processed further to earn good profits.  

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Answer:

Explanation:

1. What is the company’s contribution margin (CM) ratio?

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= $75,600/$315,000

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2. What is the estimated change in the company’s net operating income if it can increase total sales by $1,100?

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Change in operating income

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How does consumer response to advertising vary on different days of the week and at different times of the day
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Answer:

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Jordan plans to add a porch to her house. The new 16' 18' porch will cost an average of $27 por square foot. Jorden also plans t
tatiyna

Question is incomplete as the cost of the sidewalk is not given :

Assume the sidewalk cost an additional $6 per foot. ​

Answer:

$8366

Explanation:

Given that :

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Area of porch = (16 * 18) = 288 ft²

Cost per ft² = $27

Cost of porch = ($27 * 288) = $7,776

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Total cost :

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Kindly note that the cost pwr foot of sidewalk was erroneously excluded and the value employed for the cost was only assumed.

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