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Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,200 units of product and incurred $240,000 direct material cost and $156,000 direct labor costs. For financial statement purposes, XYZ capitalized $102,000 indirect costs to inventory. For tax purposes, it had to capitalize $139,200 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 300 units in inventory. In its second year of operations, XYZ manufactured 2,400 units of product and incurred $501,600 direct material cost and $330,000 direct labor costs. For financial statement purposes, XYZ capitalized $166,800 indirect costs to inventory. For tax purposes, it had to capitalize $231,600 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 340 items in inventory. Required: a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. Note: Round down the number of units to whole number. Book Tax Cost of beginning inventory Total cost of units produced Cost of units available for sale $ 0 $ 0 Cost of ending inventory Cost of goods sold $ 0 $ 0

Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,200 units of product and incurred $240,000 direct material cost and $156,000 direct labor costs. For financial statement purposes, XYZ capitalized $102,000 indirect costs to inventory. For tax purposes, it had to capitalize $139,200 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 300 units in inventory. In its second year of operations, XYZ manufactured 2,400 units of product and incurred $501,600 direct material cost and $330,000 direct labor costs. For financial statement purposes, XYZ capitalized $166,800 indirect costs to inventory. For tax purposes, it had to capitalize $231,600 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 340 items in inventory. Required: a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. Note: Round down the number of units to whole number. Book Tax Cost of beginning inventory Total cost of units produced Cost of units available for sale $ 0 $ 0 Cost of ending inventory Cost of goods sold $ 0 $ 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,200 units of product and incurred $240,000 direct material cost and $156,000 direct labor costs. For financial statement purposes, XYZ capitalized $102,000 indirect costs to inventory. For tax purposes, it had to capitalize $139,200 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 300 units in inventory. In its second year of operations, XYZ manufactured 2,400 units of product and incurred $501,600 direct material cost and $330,000 direct labor costs. For financial statement purposes, XYZ capitalized $166,800 indirect costs to inventory. For tax purposes, it had to capitalize $231,600 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 340 items in inventory. Required: a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. Note: Round down the number of units to whole number. Book Tax Cost of beginning inventory Total cost of units produced Cost of units available for sale $ 0 $ 0 Cost of ending inventory Cost of goods sold $ 0 $ 0
Transcribed Image Text:Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,200 units of product and incurred $240,000 direct material cost and $156,000 direct labor costs. For financial statement purposes, XYZ capitalized $102,000 indirect costs to inventory. For tax purposes, it had to capitalize $139,200 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 300 units in inventory. In its second year of operations, XYZ manufactured 2,400 units of product and incurred $501,600 direct material cost and $330,000 direct labor costs. For financial statement purposes, XYZ capitalized $166,800 indirect costs to inventory. For tax purposes, it had to capitalize $231,600 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 340 items in inventory. Required: a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the LIFO costing convention. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFO costing convention. Note: Round down the number of units to whole number. Book Tax Cost of beginning inventory Total cost of units produced Cost of units available for sale $ 0 $ 0 Cost of ending inventory Cost of goods sold $ 0 $ 0
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