Crisps Inc. is a producer of potato chips. A single production process at Crisps Inc. yields potato chips as the main product and a byproduct that can also be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs.

There were no beginning inventories on September 1, 2015.
Required
1. What is the gross margin for Crisps Inc. under the production method and the sales method of byproduct accounting?
2. What are the inventory costs reported in the statement of financial position on September 30, 2015, for the main product and byproduct under the two methods of byproduct accounting in requirement 1?

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Production in kilograms) 40,000 8,000 Selling Price per Kilogram S20 Sales (in kilograms) Main product Potato chips Byproduct 32,000 5,600