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Distant Ride, Inc., develops and makes a battery for electrical cars. The manufacturing costs per unit include $450 direct materials, $180 direct labor, and $300
Distant Ride, Inc., develops and makes a battery for electrical cars. The manufacturing costs per unit include $450 direct materials, $180 direct labor, and $300 manufacturing overhead. These costs are based on a production and sales volume of 5,000 units per year. Advertising costs amounted to $400,000. Product design cost for the battery amounted to $520,000. Companywide administrative costs amounted to $250,000. Research and development on battery technology amount to $1,800,000. Distant Ride's management team established the sales price at 160 percent of GAAP-defined product cost. Required a. Determine the total amount of upstream costs. b. Determine the total amount of downstream cosis. . c. Determine the total amount of midstream costs. d. Determine the sales price per unit. e. Prepare a GAAP-based income statement. f. Provide a plausible explanation as to why the company incurred the loss shown on the income statement prepared to satisfy Requirement e. (Hint: Calculate the full cost of making and selling the units.)
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