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XYZ Corporation manufactures a product that yields the byproduct Abc. The only costs associated with Abc are selling costs of $0.10 for each unit sold.
XYZ Corporation manufactures a product that yields the byproduct Abc. The only costs associated with Abc are selling costs of $0.10 for each unit sold. XYZ accounts for sales of Abc by deducting Abc's separable costs from Abc's sales and then deducting this net amount from the major product's cost of goods sold. Abc's sales were 200,000 units at $1.00 each. If XYZ changes its method of accounting for Abc's sales by showing the net amount as additional sales revenue, the XYZ 's gross margin would: increase by $180,000. be unaffected. increase by $220,000. increase by $200,000
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