COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Chapter 16, Problem 16.29E
Accounting for a main product and a byproduct. (Cheatham and Green, adapted) 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 2017, the cost of operations is $520,000. Production and sales data are as follows:
There were no beginning inventories on September 1, 2017.
- 1. What is the gross margin for Crispy, Inc., under the production method and the sales method of byproduct accounting?
Required
- 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.
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Accounting for a main product and a byproduct (Cheatham and green, adapted)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 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 $520,000. Production and sales data are as follows:
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 2020, the cost of operations is $485,000. Production and sales data are as follows:
Note: There were no beginning inventories on September 1, 2020.
Requirements
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1.
What is the gross margin forbYum,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.
Manila Corporation, a manufacturing firm, has two joint products, Pure and Diluted. The Corporation records shoe that the joint production cost for the month of May 2020 amounted to P45,000. During the month, the further processing cost beyond the split-off point, needed to convert the product into … form, amounted to P240,000 for 2,400 units of Pure and P36,000 for 1,200 units of diluted. Pure sells P25 unit while Diluted sells for P50 per unit.
Assuming that the company uses the net realizable value method for allocating joint production cost. Its cost allocated to Pure for the month of May would be
Chapter 16 Solutions
COST ACCOUNTING
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16MCQCh. 16 - Joint costs of 8,000 are incurred to process X and...Ch. 16 - Houston Corporation has two products, Astros and...Ch. 16 - Dallas Company produces joint products, TomL and...Ch. 16 - Earls Hurricane Lamp Oil Company produces both A-1...Ch. 16 - Joint-cost allocation, insurance settlement....Ch. 16 - Joint products and byproducts (continuation of...Ch. 16 - Net realizable value method. Sweeney Company is...Ch. 16 - Alternative joint-cost-allocation methods,...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Prob. 16.26ECh. 16 - Joint-cost allocation, sales value, physical...Ch. 16 - Joint-cost allocation: Sell immediately or process...Ch. 16 - Accounting for a main product and a byproduct....Ch. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Methods of joint-cost allocation, ending...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Comparison of alternative joint-cost-allocation...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Joint-cost allocation. SW Flour Company buys 1...Ch. 16 - Further processing decision (continuation of...Ch. 16 - Joint-cost allocation with a byproduct. The...Ch. 16 - Byproduct-costing journal entries (continuation of...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Prob. 16.41PCh. 16 - Prob. 16.42PCh. 16 - Methods of joint-cost allocation, comprehensive....
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