Torid Company processes 18,700 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $10 per gallon and Product Y,the main product,sells for $150 per gallon.The following information is for December:

The manufacturing costs totalled $30,000.
How much is the ending inventory for the byproduct if byproducts are recognized in the general ledger at the point of sale?
A)$0
B)$1750
C)$3000
D)$26,250

Question

Torid Company processes 18,700 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $10 per gallon and Product Y,the main product,sells for $150 per gallon.The following information is for December:

The manufacturing costs totalled $30,000.
How much is the ending inventory for the byproduct if byproducts are recognized in the general ledger at the point of sale?
A)$0 
B)$1750 
C)$3000 
D)$26,250

Quizplus · Accepted Answer

Byproducts are not recognized until they are sold.Therefore,the ending inventory is always $0.

Torid Company Processes 18,700 Gallons of Direct Materials to Produce