Farmer Company processes 40,000 pounds of direct materials to produce two products, Apple and Apple Sauces,...
Farmer Company processes 40,000 pounds of direct materials to produce two products, Apple and Apple Sauces, a byproduct, sell for $9 per pound, and Apples, the main product, sells for $50 per pound. The following information is for July:
| Production | Sales | Beginning Inventory | Ending Inventory | |
| Apple Sauces | 8,700 | 8,000 | 0 | 700 |
| Apples | 25,500 | 24,900 | 300 | 900 |
The manufacturing costs totaled $260,000, beginning inventory $3,200.
Required
a) Prepare a July income statement assuming that Farmer Company recognizes the byproduct revenue at the time of sale. The company uses FIFO for the inventory flow assumption.
b) Prepare the journal entry to record the byproduct sales.
Homework Answers
It required more information
about per unit price regarding by product. So the proper journal
entries can not be prepared.
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Farmer Company processes 40,000 pounds of direct materials to
produce two products, Apple and Apple Sauces,...
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