For the next 2 items. Markgil Corp. manufactures a product that yields the by-product "Yum". The only costs associated with Yum are selling costs of P.10 for each unit sold. Abel accounts for sales of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. If Markgil changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Markgil's gross margin would *
For the next 2 items. Markgil Corp. manufactures a product that yields the by-product "Yum". The only costs associated with Yum are selling costs of P.10 for each unit sold. Abel accounts for sales of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. If Markgil changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Markgil's gross margin would *
a. Increase by P90,000
b. Decrease by P90,000
c. Increase by P100,000
d. Increase by P100,000
e. Be unaffected
If Markgil changes its method of accounting for Yum's sales by showing the net amount as other income, then Markgil's gross margin would *
a. Increase by P90,000
b. Decrease by P90,000
c. Increase by P100,000
d. Increase by P110,000
e. Be unaffected
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