Q1) Maryland Company makes lumber for companies who produce furniture. Main product is completed lumber with a byproduct of wood shavings. Byproduct is sold to plywood manufacturers. For July, manufacturing process incurred $332,000 in total costs. Eighty thousand board feet of lumber were made and sold along with 6,800 pounds of shavings. Finished lumber sold for $6.00 per board foot and shavings sold for $0.60 a pound. There was no starting or ending inventories.
Create the income statement showing byproduct (1) as cost reduction during production, and (2) as revenue item when sold.