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Chapter 12: Applying Excel
Data
Exhibit 12-7 Santa Maria Wool Cooperative
Cost of wool	$244,000
Cost of separation process	$40,000
Sales value of intermediate products at split-off point:
Undyed coarse wool	$117,000
Undyed fine wool	$160,000
Undyed superfine wool	$76,000
Costs of further processing (dyeing) intermediate products:
Undyed coarse wool	$50,000
Undyed fine wool	$60,000
Undyed superfine wool	$10,000
Sales value of end products:
Dyed coarse wool	$156,000
Dyed fine wool	$193,000
Dyed superfine wool	$93,000

If 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?

1) Overall profit from processing all intermediate products?

b. What is the financial advantage (disadvantage) from further processing?

1) Financial advantage OR financial disadvantage from further processing of undyed coarse wool = ?

2) Financial advantage OR financial disadvantage from further processing of undyed fine wool = ?

3) Financial advantage OR financial disadvantage from further processing of undyed superfine wool =?

c-1. With these new costs and selling prices, what recommendations would you make concerning the companys operations?

1) Sell as is or process further the intermediate product undyed coarse wool?

2) Sell as is or process further the intermediate product undyed fine wool?

3) Sell as is or process further the intermediate product undyed superfine wool?

c-2. If your recommendation in part (c-1) is followed, what would be the companys overall profit?

1) Overall profit from the following plan in part C =