3 Data 4 Exhibit 13-7 Santa Maria Wool Cooperative 5 Cost of wool $200,000 6 Cost of separation process $40,000 7 Sales value of intermediate products at split-off point: 8 Undyed coarse wool $120,000 9 Undyed fine wool $150,000 10 Undyed superfine wool $60,000 11 Costs of further processing (dyeing) intermediate products: 12 Undyed coarse wool $50,000 13 Undyed fine wool $60,000 14 Undyed superfine wool $10,000 15 Sales value of end products: 16 Dyed coarse wool $160,000 17| Dyed fine wool $240,000 18 Dyed superfine wool $90,000 19 20 Enter a formula into each of the cells marked with a ? below 21 Example: Joint Product Costs and the Contribution Approach 22 23 Analysis of the profitability of the overall operation: 24 Combined final sales value 25 Less costs of producing the end produs: 26 Cost of wool ? 27 Cost of separation process ? 28 Combined costs of dyeing 12 29 Profit 30 a 2 ? 2 Fine Wool 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 Coarse Wool ? 2 ? ? 2 ? 2 ? ? ? Superfine Wool ? ? ? ? ? A