This year Amber opened a factory to process and package landscape mulch. At the end of the year, Ambers accountant prepared the following schedule for allocating manufacturing costs to the mulch inventory, but her accountant is unsure of what costs need to be allocated to the inventory under UNICAP.

Approximately 20 percent of management time, space, and expenses are spent on this manufacturing process.

At the end of the year, Ambers accountant indicated that the business had processed 11,200 bags of mulch but only 1,120 bags remained in the ending inventory.

What is Ambers tax basis in her ending inventory after applying the UNICAP rules to allocate indirect costs to inventory? *Assume direct costs are allocated to inventory according to the level of ending inventory. *In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.)

Costs Tax Invento Material Mulch and packaging Administrative supplies Factory labor Sales & advertising Administration S 8,000 645 21,600 5,550 8,850 6,650 3,600 9,700 3,900 Salaries Property taxes: Factory Offices Depreciation: Factory Offices Total