(Accounting for by-products) Tamecka Company manufactures various wood products that yield sawdust as a by-product. Selling costs associated with the sawdust are $4 per ton sold. The company accounts for sawdust sales by deducting the sawdust’s net realizable value from the major products’ cost of goods sold. Sawdust sales in 2006 were 24,000 tons at $21 each. If Tamecka changes its method of accounting for sawdust sales to show the net realiz¬ able value as Other Revenue (presented at the bottom of the income state¬ ment), how would its gross margin be affected? Show your work.

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