Answer the following questions using the information below:
Athens Company processes 15,000 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $8 per gallon and Product Y, the main product, sells for $100 per gallon. The following information is for August:
The manufacturing costs totaled $30,000.
-How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale?
A)$0
B)$563
C)$1,500
D)$17,500

Question

Answer the following questions using the information below:
Athens Company processes 15,000 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $8 per gallon and Product Y, the main product, sells for $100 per gallon. The following information is for August:
  The manufacturing costs totaled $30,000.
-How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale?
A)$0 
B)$563 
C)$1,500 
D)$17,500

Quizplus · Accepted Answer

When byproducts are recognized at the point of sale, they are not recorded in inventory, so there is no ending inventory reduction.

Answer the Following Questions Using the Information Below