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

question 56

Multiple Choice

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 $15,000.
-How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at NRV during production?

• A) $0
• B) $1,500
• C) $14,375
• D) $16,000
• E) $17,500

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Definitions:

Process Layout

An arrangement of resources in a manufacturing or service environment where similar processes are grouped together.

Product

A tangible good, an intangible service, or a combination of these.

Equipment

Tools or machinery that are necessary for a particular kind of work or activity, often utilized in various fields such as construction, manufacturing, and medical.

Materials

The physical substances from which objects are made, often used in the context of manufacturing and construction.