Answer the Following Questions Using the Information Below:
Torid Company

question 89

Multiple Choice

Answer the following questions using the information below:
Torid Company processes 17,500 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $5 per gallon and Product Y, the main product, sells for $150 per gallon. The following information is for December:
$\begin{array}{lccc}&\text { Production } & \text { Sales } & \begin{array}{c}\text { Beginning } \\\text { Inventory }\end{array} & \begin{array}{r}\text { Ending } \\\text { Inventory }\end{array}\\\text { Product X: } & 5,375 & 5,300 & 0 & 75 \\\text { Product Y: } & 9,975 & 9,990 & 25 & 10\end{array}$ The manufacturing costs totalled $25,000.
-How much is the ending inventory for the byproduct if byproducts are recognized in the general ledger at the point of sale?

• A) $0
• B) $375
• C) $1,500
• D) $2,500

---

Definitions:

Tax Liability

The total amount of tax that an individual or entity is legally obligated to pay to tax authorities.

Average Tax Rate

The portion of total taxable income that is paid in taxes, calculated by dividing the total tax amount by the total income.

Average Tax Rate

The ratio of total taxes paid to total taxable income, representing the percentage of income that goes towards taxes.

Taxable Income

The amount of an individual's or a company's income used to determine how much tax they owe to the government in a given tax year.