Yum, Inc. is a producer of potato chips. A single production process at Yum,

Inc., yields potato chips 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 2014, the cost of operations is $ 495,000. Production and sales data are as follows:

	Production (in pounds)			Sales (in pounds)			Selling Price per Pound
Main Product:
Potato Chips		44,000			35,200			$18
Byproduct		8,400			8,000			$10

There were no beginning inventories on September 1, 2014

Requirements:

What is the gross margin for Yum, Inc. under the production method and the sales method of byproduct accounting?

What are the inventory costs reported in the balance sheet on Sept.30,2014, for the main product and byproduct under the two methods of byproduct accounting in requirement 1?

Requirement 1:

	Production	Sales
	Method	Method
Revenues
Main product
Byproduct
Total revenues
Cost of goods sold
Total manufacturing costs
Deduct value of byproduct production
Net manufacturing costs
Deduct main product inventory
Cost of goods sold
Gross margin

Requirement 2. What are the inventory costs reported in the balance sheet on September 30,

2014, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? (Enter a "0" for any cells with a zero balance.)

	Production	Sales
	method	method
Main product
Byproduct