Use the information below to answer the following question(s).Troy Company processes 15,000 litres of direct materials to produce two products, Product X and Product Y.Product X, a byproduct, sells for $4 per litre, and Product Y, the main product, sells for $50 per litre.The following information is for August:
The manufacturing costs totalled $95,000.
-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)$16,000
E)$17,500

Question

Use the information below to answer the following question(s).Troy Company processes 15,000 litres of direct materials to produce two products, Product X and Product Y.Product X, a byproduct, sells for $4 per litre, and Product Y, the main product, sells for $50 per litre.The following information is for August:
  The manufacturing costs totalled $95,000.
-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)$16,000 
E)$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 for the byproduct.

Use the Information Below to Answer the Following Question(s)