Claude Deux-Bussy is the owner and operator of Boissons Barbe-Bleue Sarl, a bulk soft-drink producer. A single

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Claude Deux-Bussy is the owner and operator of Boissons Barbe-Bleue Sarl, a bulk soft-drink producer. A single production process yields two bulk soft drinks, Pelléas (the main product) and Mélisande (the by-product). Both products are fully processed at the split-off point and there are no separable costs.

Summary data for September 2022 are as follows:

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There were no opening stocks on 1 September 2022. The following is an overview of operations:
Required

1 What is the gross margin for Boissons Barbe-Bleue under methods A, B, C and D of by-product accounting described in this chapter ?
2 What are the stock amounts reported in the balance sheet on 30 September 2022 for Pelléas and Mélisande under each of the four methods of by-product accounting cited in requirement 1?
3 Which method would you recommend Boissons Barbe-Bleue to use? Explain.

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Management And Cost Accounting

ISBN: 9781292436029

8th Edition

Authors: Alnoor Bhimani, Srikant Datar, Charles Horngren, Madhav Rajan

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