Accounting for a main product and a byproduct. (Cheatham and Green, adapted) Yum 1.T otal revenues under sales Inc. is a producer of potato chips. A single production process at Yum Inc. yields potato chips method, $668,000 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.

For September 2009, the cost of operations is $480,000. Production and sales data are as follows:

REQUIRED 1. What is the gross margin for Yum 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, 2009, for the main product and byproduct under the two methods of byproduct accounting in requirement 1?LO1

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Production Selling Price (in kg) Sales (in kg) per kg Main product: Potato chips Byproduct 40,000 32,000 $20 8,000. 5,600 $ 5 There were no beginning inventories on September 1, 2009.