Torid Company Processes 18,175 Gallons of Direct Materials to Produce

Multiple Choice

Torid Company processes 18,175 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $6 per gallon and Product Y, the main product, sells for $190 per gallon. The following information is for December:

The manufacturing costs totalled $29,000.
If the byproduct inventory is recorded at NRV less profit margin of 40%, the balance sheet will report ________ of byproduct inventory.

A) $900
B) $0
C) $3800
D) $540