East-Coast Oceanic Water (EOW) desalinates and bottles sea water. The desalinated water is in high demand from a large group of environmentally conscious people on the east coast of Canada. During March, EOW processes 1,100 litres of sea water and obtains 1,100 litres of drinking water and 65 kilograms of sea salt (the rest of the sea water evaporates in the desalinization process). Processing the 1,100 litres of water costs EOW $1,400. EOW sells 880 litres of the desalinated wate in 2-litre containers for $7 per container. In addition, EOW sells 55 kilograms of sea salt for $1.10 per kilogram. Due to the relatively small proportion of sea salt, EOW has decided to treat it as a byproduct. Required Requirements 1 and 2. Assuming EOW accounts for the byproduct using the production method, what is the inventoriable cost for each product and EOW's gross margin? Calculate the gross margin and gross margin percentage for East-Coast Oceanic Inc. under the production method, and then for the sales method. (Only complete the necessary boxes, do not enter "0". Round interim calculations to the nearest cent. Round final answers to the nearest whole dollar. Round the gross margin percentage to two decimal places.) Production Sales Method Method Revenues Main product Byproduct Total revenues Cost of goods sold Gross margin Gross margin percentage % % Enter any number in the edit fields and then continue to the next question. Now we can calculate the inventoriable cost for each product under the production method and the sales method. (Enter an amount in each input box. If an amount is zero, enter "0".) Production Method Sales Method Main product Byproduct Requirement 3. Discuss the difference between the two methods of accounting for byproducts. The method recognizes the byproduct cost as inventory This method sets the cost of the byproduct inventory equal to its When the byproduct is sold, inventory is through the income statement. On the other hand, the method associates of the production cost with the main product. Under this method, the byproduct has inventoriable cost and is recognized Enter any number in the edit fields and then continue to the next