During year 1, Walton Manufacturing Company incurred $78,200,000 of research and development (R&D) costs to create a longlife battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $70 per unit. Packaging, shipping, and sales commissions are expected to be $12 per unit. Walton expects to sell 1,700,000 batteries before new research renders the battery design technologically obsolete. During year 1, Walton made 434,000 batteries and sold 390,000 ofthem. Required 3. Identify the upstream and downstream costs. b. Determine the year1 amount of cost of goods sold and the ending inventory balance that would appear on the nancial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Walton desires to earn a profit margin that is equal to 25 percent ofthe total cost of developing, making, and distributing the batteries. d. Prepare a GAAPbased income statement for year 1. Use the sales price developed in Requirement c. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Identify the upstream and downstream costs. 1. Research and development 2. Packaging 3. Shipping 4. Sales commissions