Required information

Chapter 11: Applying Excel

Step 1: Download the Applying Excel form located on the left-hand side, under files.

Step 2: Then enter formulas in all cells that contain question marks. For example, in cell C26 enter the formula "= B5".

Step 3: Check your worksheet by changing the cost of further processing undyed coarse wool in cell B12 to $30,000. The overall financial advantage (disadvantage) from processing all intermediate products into final products should now be $150,000 and the financial advantage (disadvantage) from further processing undyed coarse wool should now be $10,000. If you do not get these answers, find the errors in your worksheet and correct them.

Step 4: Proceed to the requirements below only after completing your worksheet as it will be used to answer the following questions.

Chapter 11: Applying Excel
Data
Exhibit 11-7 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	$240,000
Dyed superfine wool	$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	Superfine
	Wool	Wool	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	?	?	?

Chapter 11: Applying Excel: Exercise

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:

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?

c-1. With these new costs and selling prices, what recommendations would you make concerning the companys operations?

c-2. If your recommendation in part (c-1) is followed, what would be the companys overall profit?