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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education