Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 2,000 units of product and incurred $490,000 direct material cost and $325,000 direct labor costs. For financial statement purposes, XYZ capitalized $280,000 indirect costs to inventory. For tax purposes, it had to capitalize $311,000 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 500 units in inventory. In its second year of operations, XYZ manufactured 4,000 units of product and incurred $1,000,000 direct material cost and $680,000 direct labor costs. For financial statement purposes, XYZ capitalized $544,000 indirect costs to inventory. For tax purposes, it had to capitalize $598,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 800 items in inventory.

Required:

1. Compute XYZs cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention.
2. Compute XYZs cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention.