Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZmanufactured 1,900 units of product and incurred $351,500 direct material cost and $194,750 direct labor costs. For financialstatement purposes, XYZ capitalized $149,750 indirect costs to inventory. For tax purposes, it had to capitalize $180,750indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 190 units in inventory. In its second yearof operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct laborcosts. For financial statement purposes, XYZ capitalized $282,000 indirect costs to inventory. For tax purposes, it had tocapitalize $336,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 380 items ininventory.Required:a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses theFIFO costing convention.b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses theLIFO costing convention.Complete this question by entering your answers in the tabs below.Required A Required BCompute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFOcosting convention. (Do not round intermediate calculations.)Cost of beginning inventoryTotal cost of units producedCost of units available for saleCost of ending inventoryCost of goods sold$$Book0 $0 $Tax00 Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZmanufactured 1,900 units of product and incurred $351,500 direct material cost and $194,750 direct labor costs. For financialstatement purposes, XYZ capitalized $149,750 indirect costs to inventory. For tax purposes, it had to capitalize $180,750indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 190 units in inventory. In its second yearof operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct laborcosts. For financial statement purposes, XYZ capitalized $282,000 indirect costs to inventory. For tax purposes, it had tocapitalize $336,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 380 items ininventory.Required:a. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses theFIFO costing convention.b. Compute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses theLIFO costing convention.Complete this question by entering your answers in the tabs below.Required A Required BCompute XYZ's cost of goods sold for book purposes and for tax purposes for second year assuming that XYZ uses the FIFOcosting convention. (Do not round intermediate calculations.)Cost of beginning inventoryTotal cost of units producedCost of units available for saleCost of ending inventoryCost of goods sold$$Book0 $0 $Tax00

There are different types or methods for inventory valuation. The few common methods are the FIFO…

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 $351,500 direct material cost and $194,750 direct labor costs. For financial statement purposes, XYZ capitalized $149,750 indirect costs to inventory. For tax purposes, it had to capitalize $180,750 indirect costs to inventory under the UNICAP rules. At the end of its first year, XYZ held 190 units in inventory. In its second ye of operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct labo costs. For financial statement purposes, XYZ capitalized $282,000 indirect costs to inventory. For tax purposes, it had to capitalize $336,000 indirect costs to inventory under the UNICAP rules. At the end of its second year, XYZ held 380 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 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. (Do not round intermediate calculations.) 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 $ Tax 0 0

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q