Data Exhibit 6-7 Santa Maria Wool Cooperative Cost of wool $200,000 Cost of separation process $40,000 Sales value of intermediate products at split-off point: Undyed coarse wool $120,000 Undyed fine wool $150,000 Undyed superfine wool $60,000 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 $160,000 Dyed fine wool Dyed superfine wool $240,000 $90,000 Enter a formula into each of the cells marked with a ? below Example: Joint Product Costs and the Contribution Approach Analysis of the profitability of the overall operation: Combined final sales value Less costs of producing the end products: Cost of wool Cost of separation process Combined costs of dyeing Profit Analysis of sell or process further: ? ? ? ? ? Coarse Fine Wool Wool Superfine Wool Final sales value after further processing ? ? ? Less sales value at the split-off point ? ? ? Incremental revenue from further processing ? ? ? Less cost of further processing (dyeing) ? ? ? Financial advantage (disadvantage) of further processing