1 Chapter 12: Applying Excel $200,000 $40,000 $120,000 $150,000 $60,000 3 Data 4 Exhibit 12-7 Santa Maria Wool Cooperative 5 Cost of wool 6 Cost of separation process 7 Sales value of intermediate products at split-off point: 8 Undyed coarse wool 9 Undyed fine wool 10 Undyed superfine wool 1 Costs of further processing (dyeing) intermediate products: 12 Undyed coarse wool 13 Undyed fine wool 14 Undyed superfine wool 15 Sales value of end products: 16 Dyed coarse wool 17 Dyed fine wool 18 Dyed superfine wool 19 20 Enter a formula into each of the cells marked with a ? below 21 Example: Joint Product Costs and the Contribution Approach $50,000 $60,000 $10,000 $160,000 $240,000 $90,000 23 Analysis of the profitability of the overall operation: 24 Combined final sales value 25 Less costs of producing the end products: 26 Cost of wool 27 Cost of separation process $90,000 18 Dyed superfine wool 19 20 Enter a formula into each of the cells marked with a ? below 21 Example: Joint Product Costs and the Contribution Approach ? 23 Analysis of the profitability of the overall operation: 24 Combined final sales value 25 Less costs of producing the end products: 26 Cost of wool 27 Cost of separation process 28 Combined costs of dyeing 29 Profit 30 31 Analysis of sell or process further: 32 33 34 Final sales value after further processing 35 Less sales value at the split-off point 36 Incremental revenue from further processing 37 Less cost of further processing (dyeing) 38 Financial advantage (disadvantage) of further processing 39 40 41 42 Coarse Wool Fine Wool Superfine Wool ? ? 2. In industries that process joint products, the costs of the raw materials inputs and the sales values of intermediate and final products are often volatile. Change the data area of your worksheet to match the following: 1 Chapter 12: Applying Excel 3 4 5 6 $ $ 224,000 40,000 7 8 9 $ $ $ 118,000 140,000 67,000 10 11 12 13 14 15 16 17 18 Data Exhibit 12-7 Santa Maria Wool Cooperative Cost of wool Cost of separation process Sales value of intermediate products at split-off point: Undyed coarse wool Undyed fine wool Undyed superfine wool Costs of further processing (dyeing) intermediate products: Undyed coarse wool Undyed fine wool Undyed superfine wool Sales value of end products: Dyed coarse wool Dyed fine wool Dyed superfine wool $ $ $ 50,000 60,000 10,000 $ $ $ 163,000 195,000 85,000 f your formulas are correct, you should get the correct answers to the following questions. a. What is the overall profit if all intermediate products are processed into final products? Overall profit from processing all intermediate products 2. What is the financial advantage (disadvantage) from further processing? from further processing undyed coarse wool from further processing undyed fine wool from further processing undyed superfine wool C-1. With these new costs and selling prices, what recommendations would you make concerning the company's operations? Sell as is or process further the intermediate product undyed coarse wool? Sell as is or process further the intermediate product undyed fine wool? Sell as is or process further the intermediate product undyed superfine wool