Sparta Company processes 15,000 gallons of direct materials to produce two products, Product X and Product Y. Product X sells for $4 per gallon and Product Y, the main product, sells for $50 per gallon. The following information is for August:
Beginning Ending
Production Sales Inventory Inventory
Product X: 4,375 4,000 0 375
Product Y: 10,000 9,625 125 500
The manufacturing costs totaled $15,000.
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?