ures a product that yields the by-product "Yum." The only costs Abel Corp. man Sociated with Yum are selling costs of P.10 for each unit sold. Abel accounts for les of Yum by deducting Yum's separable costs from Yum's sales, and then educting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. wIf Abel changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Abel's gross margin would Increase by P 90,000 Increase by P 100,000 a. b. Increase by P 110,000 d. Be unaffected If Abel changes its method of accounting for Yom's sales by showing the net amount as other income, then Abel's gross margin would Decrease by P 90,000 Increase by P 100,000 a. b. c. Increase by P 110,000 d. Be unaffected
ures a product that yields the by-product "Yum." The only costs Abel Corp. man Sociated with Yum are selling costs of P.10 for each unit sold. Abel accounts for les of Yum by deducting Yum's separable costs from Yum's sales, and then educting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. wIf Abel changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Abel's gross margin would Increase by P 90,000 Increase by P 100,000 a. b. Increase by P 110,000 d. Be unaffected If Abel changes its method of accounting for Yom's sales by showing the net amount as other income, then Abel's gross margin would Decrease by P 90,000 Increase by P 100,000 a. b. c. Increase by P 110,000 d. Be unaffected
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Abel Corp. manufactures a product that yields the by-product "Yum." The only costs
Aciated with Yum are selling costs of P.10 for each unit sold. Abel accounts for
es 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 Abel changes its method of accounting for Yum's sales by showing the net
amount as additional sales revenue, then Abel's gross margin would
Increase by P 90,000
Increase by P 100,000
a.
b.
Increase by P 110,000
d. Be unaffected
5. If Abel changes its method of accounting for Yom's sales by showing the net
amount as other income, then Abel's gross margin would
Decrease by P 90,000
b. Increase by P 100,000
Increase by P 110,000 d.
a.
Be unaffected
C.
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