Chapter 12: Applying Excel $162,000 $40,000 3 Data Exhibit 12-7 Santa Maria Wool Cooperative 5 Cost of wool 5. Cost of separation process 7 Sales value of intermediate products at split-off point: 3 Undyed coarse wool 9 Undyed fine wool 10 Undyed superfine wool 11 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 $112,000 $146,000 $60,000 $50,000 $60,990 $10,000 $146,000 $235,000 $94,000 o Enter a formula into each of the cells marked with a ? below 1 Example: Joint Product Costs and the Contribution Approach 3 Analysis of the profitability of the overall operation: -4 Combined final sales value 5 Less costs of producing the end products: 6 Cost of wool 7 Cost of separation process 8 Combined costs of dyeing 9 Profit 31 Analysis of sell or process further: Coarse Wool Fine Wool Superfine Wool 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 a. What is the overall profit if all intermediate products are processed into final products? Overall profit from processing all intermediate products b. 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 c1. 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? c.2. If your recommendation in part (1) is followed, what would be the company's overall profit? Overall profit from following the plan in part (c)