Chapter_7_Applying_Excel.xls
Chapter 7: Applying Excel
Data
Exhibit 7-6 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
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) ? ? ?
Profit (loss) from further processing ? ? ?
Enter a formula into each of the cells marked with a ? below
Example: Joint Product Costs and the Contribution Approach
Page 1
Chapter_7_Applying_Excel.xls
Chapter 7: Applying Excel
Data
Exhibit 7-6 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 $90,000
Analysis of the profitability of the overall operation:
Combined final sales value 490,000$
Less costs of producing the end products:
Cost of wool 200,000$
Cost of separation process 40,000
Combined costs of dyeing 120,000 360,000
Profit 130,000$
Analysis of sell or process further:
Coarse Fine Superfine
Wool Wool Wool
Final sales value after further processing 160,000$ 240,000$ 90,000$
Less sales value at the split-off point 120,000 150,000 60,000
Incremental revenue from further processing 40,000 90,000 30,000
Less cost of further processing (dyeing) 50,000 60,000 10,000
Profit (loss) from further processing (10,000)$ 30,000$ 20,000$
Enter a formula into each of the cells marked with a ? below
Example: Joint Product Costs and the Contribution Approach
Page 2
Chapter_7_Applying_Excel.xls
Chapter 7: Applying Excel
Data
Exhibit 7-6 Santa Maria Wool Cooperative
Cost of wool 200000
Cost of separation process 40000
Sales value of intermediate products at split-off point:
Undyed coarse wool 120000
Undyed fine wool 150000
Undyed superfine wool 60000
Costs of further processing (dyeing) intermediate products:
Undyed coarse wool 50000
Undyed fine wool 60000
Undyed superfine wool 10000
Sales value of end products:
Dyed coarse wool 160000
Dyed fine wool 240000
Dyed superfine wool 90000
Analysis of the profitability of the overall operation:
Combined final sales value =B16+B17+B18
Less costs of producing the end products:
Cost of wool =B5
Cost of separation process =B6
Combined costs of dyeing =B12+B13+B14 =SUM(B26:B28)
Profit =C24-C28
Analysis of sell or process further:
Coarse Fine Superfine
Wool Wool Wool
Final sales value after further processing =B16 =B17 =B18
Less sales value at the split-off point =B8 =B9 =B10
Incremental revenue from further processing =B34-B35 =C34-C35 =D34-D35
Less cost of further processing (dyeing) =B12 =B13 =B14
Profit (loss) from further processing =B36-B37 =C36-C37 =D36-D37
Enter a formula into each of the cells marked with a ? below
Example: Joint Product Costs and the Contribution Approach
Chapter_7_Applying_Excel.xls
Chapter 7: Applying Excel
Data
Exhibit 7-6 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 $30,000
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 $90,000
Analysis of the profitability of the overall operation:
Combined final sales value 490,000$
Less costs of producing the end products:
Cost of wool 200,000$
Cost of separation process 40,000
Combined costs of dyeing 100,000 340,000
Profit 150,000$
Analysis of sell or process further:
Coarse Fine Superfine
Wool Wool Wool
Final sales value after further processing 160,000$ 240,000$ 90,000$
Less sales value at the split-off point 120,000 150,000 60,000
Incremental revenue from further processing 40,000 90,000 30,000
Less cost of further processing (dyeing) 30,000 60,000 10,000
Profit (loss) from further processing 10,000$ 30,000$ 20,000$
Enter a formula into each of the cells marked with a ? below
Example: Joint Product Costs and the Contribution Approach
Page 4
Chapter_7_Applying_Excel.xls
Chapter 7: Applying Excel
Data
Exhibit 7-6 Santa Maria Wool Cooperative
Cost of wool $290,000
Cost of separation process $40,000
Sales value of intermediate products at split-off point:
Undyed coarse wool $100,000
Undyed fine wool $110,000
Undyed superfine wool $90,000
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 $180,000
Dyed fine wool $210,000
Dyed superfine wool $90,000
Analysis of the profitability of the overall operation:
Combined final sales value 480,000$
Less costs of producing the end products:
Cost of wool 290,000$
Cost of separation process 40,000
Combined costs of dyeing 120,000 450,000
Profit 30,000$
Analysis of sell or process further:
Coarse Fine Superfine
Wool Wool Wool
Final sales value after further processing 180,000$ 210,000$ 90,000$
Less sales value at the split-off point 100,000 110,000 90,000
Incremental revenue from further processing 80,000 100,000 –
Less cost of further processing (dyeing) 50,000 60,000 10,000
Profit (loss) from further processing 30,000$ 40,000$ (10,000)$
Enter a formula into each of the cells marked with a ? below
Example: Joint Product Costs and the Contribution Approach
Page 5