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:

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

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 residual income?

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?

Milden company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. as an aid in planning, the company has decided to start using a contribution format income statement. to have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: cost cost formula cost of good sold $35 per unit sold advertising expense $210,000 per quarter sales commissions 6% of sales shipping expense ? administrative salaries $145,000 per quarter insurance expense $9,000 per quarter depreciation expense $76,000 per quarter management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. units sold and the related shipping expense over the last eight quarters follow: quarter units sold shipping expense year 1: first 10,000 $ 119,000 second 16,000 $ 175,000 third 18,000 $ 190,000 fourth 15,000 $ 164,000 year 2: first 11,000 $ 130,000 second 17,000 $ 185,000 third 20,000 $ 210,000 fourth 13,000 $ 147,000 milden company’s president would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter. required: 1. using the high-low method, estimate a cost formula for shipping expe