32. (Accounting for by-products) Clark Textiles Company manufactures various wood products that yield sawdust as a by-product.
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32. (Accounting for by-products) Clark Textiles Company manufactures various wood products that yield sawdust as a by-product. The only costs associated with the sawdust are selling costs of $6 per ton sold. The company accounts for sales of sawdust by deducting sawdust’s net realizable value from the major product’s cost of goods sold. Sawdust sales in 2000 were 12,000 tons at
$40 each. If Clark Textiles changes its method of accounting for sawdust sales to show the net realizable value as other revenue (presented at the bottom of the income statement), how would its gross margin be affected?
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Related Book For
Cost Accounting Traditions And Innovations
ISBN: 9780324180909
5th Edition
Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney
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