(Required) Q. 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: Ending Inventory Production Product X: 4,375 Product Y: 10,000 Sales 4,000 9,625 Beginning Inventory 0 125 375 500 The manufacturing costs totaled $30,000. a. What is the byproduct's net revenue reduction if byproducts are recognized in the general ledger during production and their revenues are a reduction of cost? b. How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale?
(Required) Q. 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: Ending Inventory Production Product X: 4,375 Product Y: 10,000 Sales 4,000 9,625 Beginning Inventory 0 125 375 500 The manufacturing costs totaled $30,000. a. What is the byproduct's net revenue reduction if byproducts are recognized in the general ledger during production and their revenues are a reduction of cost? b. How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:(Required) Q. 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:
Ending
Inventory
Production
Product X:
4,375
Product Y: 10,000
Sales
4,000
9,625
Beginning
Inventory
0
125
375
500
The manufacturing costs totaled $30,000.
a. What is the byproduct's net revenue reduction if byproducts are recognized in the general
ledger during production and their revenues are a reduction of cost?
b. How much is the ending inventory reduction for the byproduct if byproducts are recognized in
the general ledger at the point of sale?
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