Yum, Inc. is a producer of potato chips. A single production process at Yum, Inc., yields potato chips as the There were no beginning inventories on September 1, 2017. 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 2017, the cost of operations is $525,000. Production and sales data are as follows: Read the requirements. E (Click the icon to view the production and sales data.) method method Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods Requirements Total manufa Data Table Deduct value 1. What is the gross margin for Yum, 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, 2017, 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. Net manufad Production (in pounds) Sales (in pounds) Selling Price per pound Deduct main Potato Chips 40,000 32,000 $ 20 Choose from a Byproduct 8,300 6,000 $
Yum, Inc. is a producer of potato chips. A single production process at Yum, Inc., yields potato chips as the There were no beginning inventories on September 1, 2017. 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 2017, the cost of operations is $525,000. Production and sales data are as follows: Read the requirements. E (Click the icon to view the production and sales data.) method method Revenues Main product (potato chips) Byproduct (snack) Total revenues Cost of goods Requirements Total manufa Data Table Deduct value 1. What is the gross margin for Yum, 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, 2017, 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. Net manufad Production (in pounds) Sales (in pounds) Selling Price per pound Deduct main Potato Chips 40,000 32,000 $ 20 Choose from a Byproduct 8,300 6,000 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Yum, Inc. is a producer of potato chips. A single production process at Yum, 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 2017, the cost of operations is $525,000.
Production and sales data are as follows:
There were no beginning inventories on September 1, 2017.
Read the requirements.
(Click the icon to view the production and sales data.)
method
method
Revenues
Main product (potato chips)
Byproduct (snack)
Total revenues
Cost of goods
Requirements
Total manufa
i
Data Table
Deduct value
1. What is the gross margin for Yum, 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,
2017, 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
Net manufac
Production (in pounds)
Sales (in pounds)
Selling Price per pound
Deduct main
Potato Chips
40,000
32,000 $
Choose from a
Byproduct
8,300
6,000 $
financial statements.
20
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