During the company’s product manufacturing operations, an incidental by-product appeared, which is a frame for paintings, in the month of August 2018. The company sold it for 1,200 dinars, but it paid the expenses related to the incidental product for the same month in the amount of 200 dinars. • - During the month of August 2018, the company classified its table product as It is considered the main product of the company during that month, and the art frame product is the incidental product. The production quantity of the tables product during the month of August 2018 was 3,500 tables, of which only 3,000 tables were sold at a price of 60 dinars per table, and the share of the tables as a main product was the joint costs in the month. August 30,000 dinars. In your opinion, how will the company’s income statement for August 2018 be prepared, and the company’s net incidental by-product revenues be treated? According to the following: Considering the revenue of the sub-product as the company’s revenue (various revenue) = 1 degree = 1c) A- Other B- Considering the revenue of the by-product as a reduction in the joint cost = 1 degree = 1c) C- In your opinion, which of the two previous methods is preferred by the company? To measure the net revenue of the sub-product, and why?
During the company’s product manufacturing operations, an incidental by-product appeared, which is a frame for paintings, in the month of August 2018. The company sold it for 1,200 dinars, but it paid the expenses related to the incidental product for the same month in the amount of 200 dinars. • - During the month of August 2018, the company classified its table product as It is considered the main product of the company during that month, and the art frame product is the incidental product. The production quantity of the tables product during the month of August 2018 was 3,500 tables, of which only 3,000 tables were sold at a price of 60 dinars per table, and the share of the tables as a main product was the joint costs in the month. August 30,000 dinars. In your opinion, how will the company’s income statement for August 2018 be prepared, and the company’s net incidental by-product revenues be treated? According to the following: Considering the revenue of the sub-product as the company’s revenue (various revenue) = 1 degree = 1c) A- Other B- Considering the revenue of the by-product as a reduction in the joint cost = 1 degree = 1c) C- In your opinion, which of the two previous methods is preferred by the company? To measure the net revenue of the sub-product, and why?
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