Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,900 units of product and incurred $380,000 direct material cost and $247,000 direct labor costs. For financial statement purposes, XYZ capitalized $161,500 indirect costs to inventory. For tax purposes, it had to capitalize $220,400 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 440 units in inventory. In its second year of operations, XYZ manufactured 3,800 units of product and incurred $847,400 direct material cost and $522,500 direct labor costs. For financial statement purposes, XYZ capitalized $264,100 indirect costs to inventory. For tax purposes, it had to capitalize $366,700 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 480 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. Complete this question by entering your answers in the tabs below. Required Required A 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. Cost of beginning inventory Total cost of units produced Cost of units available for sale Cost of ending inventory Cost of goods sold $ $ EA Book 0 $ 0 $ Tax 0 0 Show less
Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured 1,900 units of product and incurred $380,000 direct material cost and $247,000 direct labor costs. For financial statement purposes, XYZ capitalized $161,500 indirect costs to inventory. For tax purposes, it had to capitalize $220,400 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 440 units in inventory. In its second year of operations, XYZ manufactured 3,800 units of product and incurred $847,400 direct material cost and $522,500 direct labor costs. For financial statement purposes, XYZ capitalized $264,100 indirect costs to inventory. For tax purposes, it had to capitalize $366,700 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 480 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. Complete this question by entering your answers in the tabs below. Required Required A 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. Cost of beginning inventory Total cost of units produced Cost of units available for sale Cost of ending inventory Cost of goods sold $ $ EA Book 0 $ 0 $ Tax 0 0 Show less
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Problem 07-11 (Algo) [LO 7-4, 7-11]
Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ
manufactured 1,900 units of product and incurred $380,000 direct material cost and $247,000 direct labor costs. For
financial statement purposes, XYZ capitalized $161,500 indirect costs to inventory. For tax purposes, it had to capitalize
$220,400 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 440 units in
inventory. In its second year of operations, XYZ manufactured 3,800 units of product and incurred $847,400 direct
material cost and $522,500 direct labor costs. For financial statement purposes, XYZ capitalized $264,100 indirect
costs to inventory. For tax purposes, it had to capitalize $366,700 indirect costs to inventory under the UNICAP rules. At
the end of its second year, XYZ held 480 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.
Complete this question by entering your answers in the tabs below.
Required Required
A
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.
Cost of beginning inventory
Total cost of units produced
Cost of units available for
sale
Cost of ending inventory
Cost of goods sold
$
Book
0 $
$
0 $
< Required A
Tax
0
0
Required B >
Show less A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb6d8597-773f-4d96-b14a-f3776d3e210d%2Fa1c5d386-5b8f-4c23-a38d-0e5d2d3a79f1%2F9pzetjg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 07-11 (Algo) [LO 7-4, 7-11]
Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ
manufactured 1,900 units of product and incurred $380,000 direct material cost and $247,000 direct labor costs. For
financial statement purposes, XYZ capitalized $161,500 indirect costs to inventory. For tax purposes, it had to capitalize
$220,400 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 440 units in
inventory. In its second year of operations, XYZ manufactured 3,800 units of product and incurred $847,400 direct
material cost and $522,500 direct labor costs. For financial statement purposes, XYZ capitalized $264,100 indirect
costs to inventory. For tax purposes, it had to capitalize $366,700 indirect costs to inventory under the UNICAP rules. At
the end of its second year, XYZ held 480 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.
Complete this question by entering your answers in the tabs below.
Required Required
A
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.
Cost of beginning inventory
Total cost of units produced
Cost of units available for
sale
Cost of ending inventory
Cost of goods sold
$
Book
0 $
$
0 $
< Required A
Tax
0
0
Required B >
Show less A
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