Delta Company manufactures drills and sells them to distributors. In its first year of operations, Delta manufactured 10,000 drills and incurred $50,000 in direct material costs and $80,000 in direct labor costs. In addition, Delta capitalized $30,000 indirect costs for books and $65,000 for tax under UNICAP. At the end of the year, Delta had 4,200 drills on hand. Compute Delta's CGS for tax purposes.
Delta Company manufactures drills and sells them to distributors. In its first year of operations, Delta manufactured 10,000 drills and incurred $50,000 in direct material costs and $80,000 in direct labor costs. In addition, Delta capitalized $30,000 indirect costs for books and $65,000 for tax under UNICAP. At the end of the year, Delta had 4,200 drills on hand. Compute Delta's CGS for tax purposes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Delta Company manufactures drills and sells them to distributors. In its first year of operations, Delta manufactured 10,000 drills and incurred $50,000 in direct material costs and $80,000 in direct labor costs. In addition, Delta capitalized $30,000 indirect costs for books and $65,000 for tax under UNICAP. At the end of the year, Delta had 4,200 drills on hand.
Compute Delta's CGS for tax purposes.
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