Chapter 13: Applying Excel: Exercise (Part 2 of 2) (Algo)

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:

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Chapter 13: Applying Excel
Data
Exhibit 13-7 Santa Maria Wool Cooperative
Cost of wool	$232,000
Cost of separation process	$40,000
Sales value of intermediate products at split-off point:
Undyed coarse wool	$113,000
Undyed fine wool	$121,000
Undyed superfine wool	$65,000
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	$228,000
Dyed superfine wool	$92,000

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?

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

c-1. With these new costs and selling prices, what recommendations would you make concerning the companys 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 (c-1) is followed, what would be the companys overall profit?