$1,500$ units of product and incurred $$300,000$ direct material cost and $$195,000$ direct labor costs. For financial statement purposes,

XYZ capitalized $$127,500$ indirect costs to inventory. For tax purposes, it had to capitalize $$174,000$ indirect costs to inventory under

the UNICAP rules. At the end of its first year, XYZ held $360$ units in inventory. In its second year of operations, XYZ manufactured

$3,000$ units of product and incurred $$645,000$ direct material cost and $$412,500$ direct labor costs. For financial statement purposes,

XYZ capitalized $$208,500$ indirect costs to inventory. For tax purposes, it had to capitalize $$289,500$ indirect costs to inventory under

the UNICAP rules. At the end of its second year, XYZ held $400$ items in inventory.

Required:

a$.$ Compute XYZ$\text{'}$s cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO

costing convention.

b$.$ Compute XYZ$\text{'}$s cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO

costing convention.

Answer is complete but not entirely correct.

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Required B

Compute XYZ$\text{'}$s cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO

costing convention.

Note: Round down the number of units to whole number.