B 1 Chapter 13: Applying Excel 2 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 $30,000 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 products: 26 Cost of wool $ 200,000 $ 490,000 A D B $40,000 $100,000 340,000 $ 150,000 27 Cost of separation process 28 Combined costs of dyeing 29 Profit 30 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 $160,000 $120,000 $40,000 $30,000 $10,000 Fine Superfine Wool Wool $240,000 $90,000 $150,000 $60,000 $90,000 $30,000 $60,000 $10,000 $30,000 $20,000 an Required information Chapter 13: Applying Excel (Algo) (LO13-7) The Chapter 13 Form worksheet is to be used to create your own worksheet version of the main example in the text. 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: A B 1 Chapter 13: Applying Excel N 3 4 5 $ $ 193,000 40,000 $ Data Exhibit 13-7 Santa Maria Wool Cooperative Cost of wool 6 Cost of separation process Sales value of intermediate products at split-off point: 8 Undyed coarse wool Undyed fine wool Undyed superfine wool 7 $ $ 136,000 177,000 74,000 10 $ 12 $ 50,000 60,000 10,000 $ 11 Costs of further processing (dyeing) intermediate products: 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 Dyed superfine wool $ $ 166,000 219,000 94,000 18 $ 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? 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 C-1. 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 (C-1) is followed, what would be the company's overall profit? Overall profit from following the plan in part (c)