Question
Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,400 units of product and
Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,400 units of product and incurred $224,000 direct material cost and $108,500 direct labor costs. For financial statement purposes, XYZ capitalized $63,500 indirect costs to inventory. For tax purposes, it had to capitalize $94,500 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 280 units in inventory. In its second year of operations, XYZ manufactured 2,800 units of product and incurred $462,000 direct material cost and $238,000 direct labor costs. For financial statement purposes, XYZ capitalized $102,000 indirect costs to inventory. For tax purposes, it had to capitalize $156,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 420 items in inventory.
Required: Compute XYZs cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention.
Compute XYZs cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention.
- Required A
- Required B
Compute XYZs cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. (Do not round intermediate calculations.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started