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Company XYZ manufactures a tangible product and sells the product at wholesale. In its first year of operations, XYZ manufactured

$1,600$ units of product and incurred $$320,000$ direct material cost and $$208,000$ direct labor costs. For financial statement purposes,

$xYZ$ capitalized $$136,000$ indirect costs to inventory. For tax purposes, it had to capitalize $$185,600$ indirect costs to inventory under

the UNICAP rules. At the end of its first year, XYZ held $380$ units in inventory. In its second year of operations, XYZ manufactured

$3,200$ units of product and incurred $$694,400$ direct material cost and $$440,000$ direct labor costs. For financial statement purposes,

$xYZ$ capitalized $$222,400$ indirect costs to inventory. For tax purposes, it had to capitalize $$308,800$ indirect costs to inventory under

the UNICAP rules. At the end of its second year, XYZ held $420$ items in inventory.

Required:

a$.$ Compute XYZ$\text{'}$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$\text{'}$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

Compute XYZ$\text{'}$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.

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