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 year of operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct labor 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.) Book Tax Cost of beginning inventory Total cost of units produced Cost of units avallable for sale Cost of ending inventory %24 Cost of goods sold
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 year of operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct labor 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.) Book Tax Cost of beginning inventory Total cost of units produced Cost of units avallable for sale Cost of ending inventory %24 Cost of goods sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I need the answer as soon as possible
Transcribed Image Text: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 year
of operations, XYZ manufactured 3,800 units of product and incurred $722,000 direct material cost and $418,000 direct labor
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.)
Book
Тах
Cost of beginning inventory
Total cost of units produced
Cost of units available for sale
Cost of ending inventory
Cost of goods sold
%24
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education