Exercise 1-10A (Algo) Identifying upstream and downstream costs LO 1-4 During year 1, Solomon Manufacturing Company incurred $137,200,000 of research and development (R&D) costs to create a long-life 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 $42 per unit Packaging, shipping, and sales commissions are expected to be $10 per unft. Solomon expects to sell 2,800,000 batteries before new research renders the battery design technologically obsolete. During year 1, Solomon made 435,000 batteries and sold 405,000 of them. Required a. Idently the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending Inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Solomon desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and distributing the batteries, d. Prepare a GAAP-based Income statement for year 1. Use the sales pnce developed in Requirement c ces 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. Padaging Shipping Sales commissions Complete this question by entering your answers in the tabs below. Required A Requin Required C Required D Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAR. Cost of goods sold Ending Inventory Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a GAAP-based income statement for year 1. Use the sales price developed in Requirement c. (Do not round intermediate calculations.) SOLOMON MANUFACTURING COMPANY Income Statement Net income (los)