If By-Product Revenue Is Treated as Other Revenue Instead of Deducted

question 54

Multiple Choice

If by-product revenue is treated as other revenue instead of deducted from the net-realizable-value of the main products:

• A) overall gross margin of the company will be higher.
• B) overall gross margin of the company will be lower.
• C) the answer would depend on how joint product costs were allocated.
• D) there is no difference in the overall gross margin of the company.

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Definitions:

Government Purchases

Expenditures by government entities on goods and services for current use to directly satisfy individual or collective needs.

Military Hardware

Physical, tangible equipment and weapons used by armed forces, such as tanks, aircraft, and ships.

Public Finance

The study of government revenue (taxation) and government expenditure policies and their impact on the economy.

Expend Money

The act of using or spending money for the purchase of goods, services, or other financial obligations.