Answer the Following Questions Using the Information Below

question 31

Multiple Choice

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

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Definitions:

Price Index

A statistical measure that shows changes in the price level of a basket of consumer goods and services over time, used to gauge inflation or deflation.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle, but accounts for changes in inventory value due to inflation by measuring inventory in dollar amounts rather than units.

Year-End Price

The market price of a stock or any other security on the last trading day of the year.

Price Index

A measure that examines the average change in prices of goods and services over time in an economy.