How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale

ACCOUNTING

Multiple Choice

Sparta Company processes 15,000 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $4 per gallon and Product Y, the main product, sells for $50 per gallon. The following information is for August:

Beginning Ending

Production Sales Inventory Inventory

Product X: 4,375 4,000 0 375

Product Y: 10,000 9,625 125 500


The manufacturing costs totaled $15,000.

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

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