Prepare an income statement showing the byproduct

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The Carolina Company prepares lumber for companies who manufacture furniture. The main product is finished lumber with a byproduct of wood shavings. The byproduct is sold to plywood manufacturers. For July, the manufacturing process incurred $332,000 in total costs. Eighty thousand board feet of lumber were produced and sold along with 6,800 pounds of shavings. The finished lumber sold for $8.00 per board foot and the shavings sold for $0.80 a pound. There were no beginning or ending inventories.

Question 1: Prepare an income statement showing the byproduct (1) as a cost reduction during production, and (2) as a revenue item when sold.

Cost reduction when produced

Revenue when sold

Sales: Lumber

Shavings

Total Sales:

Cost of Good Sold:

Total manufacturing costs

Byproduct

Total COGS

Gross Margin

Reference no: EM132570459

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