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Crispy, Inc. is a producer of potato chips. A single production process at Crispy, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Requirement 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? (Enter a "0" for any cells with a zero balance. For the m product inventory: Calculate the proportion of inventory first, then complete your calculation.) Production method Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods sold Total manufacturing costs Deduct value of byproduct production Net manufacturing costs There were no beginning inventories on September 1, 2020. Read the requirements. 100 Requirements 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2020, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. X

Crispy, Inc. is a producer of potato chips. A single production process at Crispy, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Requirement 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? (Enter a "0" for any cells with a zero balance. For the m product inventory: Calculate the proportion of inventory first, then complete your calculation.) Production method Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods sold Total manufacturing costs Deduct value of byproduct production Net manufacturing costs There were no beginning inventories on September 1, 2020. Read the requirements. 100 Requirements 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2020, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Crispy, Inc. is a producer of potato chips. A single production process at Crispy, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Requirement 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? (Enter a "0" for any cells with a zero balance. For the main product inventory: Calculate the proportion of inventory first, then complete your calculation.) Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods sold Total manufacturing costs Deduct value of byproduct production Net manufacturing costs Deduct main product inventory Cost of goods sold Gross margin There were no beginning inventories on September 1, 2020. Read the requirements. Production method Requirements 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2020, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. C Print Done - X
Transcribed Image Text:Crispy, Inc. is a producer of potato chips. A single production process at Crispy, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Requirement 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? (Enter a "0" for any cells with a zero balance. For the main product inventory: Calculate the proportion of inventory first, then complete your calculation.) Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods sold Total manufacturing costs Deduct value of byproduct production Net manufacturing costs Deduct main product inventory Cost of goods sold Gross margin There were no beginning inventories on September 1, 2020. Read the requirements. Production method Requirements 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2020, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. C Print Done - X
Data table Potato Chips Byproduct Production (in pounds) 46,000 8,200 Print Sales (in pounds) 34,960 $ 5,000 $ Done Selling Price per pound 26 50 - X
Transcribed Image Text:Data table Potato Chips Byproduct Production (in pounds) 46,000 8,200 Print Sales (in pounds) 34,960 $ 5,000 $ Done Selling Price per pound 26 50 - X
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