Torid Company processes 18,175 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $6 per gallon and Product Y, the main product, sells for $190 per gallon. The following information is for December:

The manufacturing costs totalled $29,000.
If the byproduct inventory is recorded at NRV less profit margin of 40%, the balance sheet will report ________ of byproduct inventory.
A) $900
B) $0
C) $3800
D) $540

Question

Torid Company processes 18,175 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $6 per gallon and Product Y, the main product, sells for $190 per gallon. The following information is for December:

The manufacturing costs totalled $29,000.
If the byproduct inventory is recorded at NRV less profit margin of 40%, the balance sheet will report ________ of byproduct inventory.
A) $900 
B) $0 
C) $3800 
D) $540

Quizplus · Accepted Answer

$900 × 60% = $540

Torid Company Processes 18,175 Gallons of Direct Materials to Produce