2. In industries that process joint products, the costs of the raw materials inp

Question

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?

overall profit from processing all intermediate prducts _______________

b. What is the residual income?

Coarse_______

Fine_______

Superfine_____-

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

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

hapter 07: Applying Excel 2 3 Data 4 Exhibit 7-6 Santa Maria Wool Cooperative 5 Cost of wool $192,000 6 Cost of separation process $40,000 7 Sales value of intermediate products at split-off point: 8    Undyed coarse wool $110,000 9    Undyed fine wool $168,000 10    Undyed superfine wool $51,000 11 Costs of further processing (dyeing) intermediate products: 12    Undyed coarse wool $50,000 13    Undyed fine wool $60,000 14    Undyed superfine wool $10,000 15 Sales value of end products: 16    Dyed coarse wool $149,000 17    Dyed fine wool $234,000 18    Dyed superfine wool $90,000
2. Inndustries that process prtprotes, match the following the costs ofthe raw mater?inputs and the sales values of itermedate and hal products are often volatle. Change the data area of your worksheet to Chapter 07: Applying Excel 3 Data Exhibt 76 Santa Maria Wool Cooperative 5 Cost of wool 92.000 40.000 Undyed coarse wool 9 Undyed fine wodl 0 Undyed superfine wool ll Costs of turther processing idyeing) ineemedare products 12 Undyed coarse wook 13 Undyed fine wool 14 Undyed supertine wool 15 Sales value of end products 16 Dyed coarse wool 17 Dyed fine wool 110.000 $168.000 $51.000 50,000 60,000 10.000 $149.000 234000 90.000 18 Dyed superfine wool If your formulas are correct, you should get the correct answers to the following questions a What is the overall proft f all intermediate products are processed into fnal products? 12:57

Explanation / Answer

$29,000

C-1 it's recommended that Coarse Wool should be sell as is and Finel wool and Super Wine Wool Should be sold after Furtehr Processing

a. Computation of Overall Profit if all intermediate Prodcut are processed further Particular Amount Calculation Combined Final Sales Value $473,000 ($149000+$234000+$90000) Less: Cost of Producing the end Products Cost of Wool $192,000 Cost of Seperation process $40,000 Combined cost of Dying $120,000 ($50000+$60000+$10000) Profit $121,000 b. Statement Showing Residual Income Particular Coarse Wool Fine Wool Super Fine Wool Final Sales Value after Further Processing $149,000 $234,000 $90,000 Less: Sales Value at the Split off Point $110,000 $168,000 $51,000 Incremental Revenue from further processing $39,000 $66,000 $39,000 Less: Cost of Further processing (Dying) $50,000 $60,000 $10,000 Profit /(Loss) from Further Processing -$11,000 $6,000

$29,000

C-1 it's recommended that Coarse Wool should be sell as is and Finel wool and Super Wine Wool Should be sold after Furtehr Processing

C-2: Company Overall Profit as per Recommended Strategy Particular Coarse Wool Fine Wool Super Fine Wool Total Sell as is Process Further Process Further Sales $110,000 $234,000 $90,000 $434,000 Cost of Further Processing $60,000 $10,000 $70,000 Profit /(Loss) after Further Processing $110,000 $174,000 $80,000 $364,000 Less: Cost of Wool $192,500 Less : Cost of Seperation $40,000 $131,500

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