60.1K

Verified Solution

Link Copied!

*6.14 Accounting for a main product and a by-product. (30 minutes) Claude Deux-Bussy is the owner and operator of Boissons Barbe-Bleue Sarl, a bulk soft- drink producer. A single production process yields two bulk soft drinks, Pellas (the main product) and Mlisande (the by-product). Both products are fully processed at the split-off point and there are no separable costs Summary data for September 2007 are as follows Cost of soft-drink operations 120 000 Production and sales data Production Sales Selling price (litres) (litres) per litre Main product (Pellas) By-product (Mlisande) 40000 8000 32000 20.00 2.00 5600 There were no opening stocks on 1 September 2004. The following is an overview of operations: Required 1 What is the gross margin for Boissons Barbe-Bleue under methods A, B, C and D of by- product accounting described on p. 187 of this chapter? 2 What are the stock amounts reported in the balance sheet on 30 September 2007 for Pellas and Mlisande under each of the four methods of by-product accounting cited in requirement 1? 3 Which method would you recommend Boissons Barbe-Bleue to use? Explain. *6.14 Accounting for a main product and a by-product. (30 minutes) Claude Deux-Bussy is the owner and operator of Boissons Barbe-Bleue Sarl, a bulk soft- drink producer. A single production process yields two bulk soft drinks, Pellas (the main product) and Mlisande (the by-product). Both products are fully processed at the split-off point and there are no separable costs Summary data for September 2007 are as follows Cost of soft-drink operations 120 000 Production and sales data Production Sales Selling price (litres) (litres) per litre Main product (Pellas) By-product (Mlisande) 40000 8000 32000 20.00 2.00 5600 There were no opening stocks on 1 September 2004. The following is an overview of operations: Required 1 What is the gross margin for Boissons Barbe-Bleue under methods A, B, C and D of by- product accounting described on p. 187 of this chapter? 2 What are the stock amounts reported in the balance sheet on 30 September 2007 for Pellas and Mlisande under each of the four methods of by-product accounting cited in requirement 1? 3 Which method would you recommend Boissons Barbe-Bleue to use? Explain

Answer & Explanation Solved by verified expert

See Answer