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This year Amber purchased a factory to process and package landscape mulch. Approximately 25 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch but only 1 million bags remained in the ending inventory. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) (Round your answers to 2 decimal places. Leave no answers blank. Enter zero if applicable.) Costs (in Tax Inventory Material: thousands) $ 8,300 530 $ Salaries: 14,200 Mulch and packaging Administrative supplies Factory labor Sales & advertising Administration Factory Offices Factory Offices Total 2,490.00 39.75 4,260.00 0.00 607.50 2,280.00 292.50 3,765.00 157.50 13,892.25 6,650 8,100 7,600 3,900 12,550 2,100 Property taxes: Depreciation: $ Explanation The costs of selling, advertising, and research are not required to be allocated to inventory under UNICAP. Direct costs (material, labor, taxes, and depreciation) are allocated to inventory according to the level of ending inventory (30%). In contrast, indirect costs (administration) are first allocated by time spent (25%) and then according to the level of ending inventory. This year Amber purchased a factory to process and package landscape mulch. Approximately 25 percent of management time, space, and expenses are spent on this manufacturing process. At the end of the year, Amber's accountant indicated that the business had processed 10 million bags of mulch but only 1 million bags remained in the ending inventory. What is Amber's tax basis in her ending inventory if the UNICAP rules are used to allocate indirect costs to inventory? (Assume direct costs are allocated to inventory according to the level of ending inventory. In contrast, indirect costs are first allocated by time spent and then according to level of ending inventory.) (Round your answers to 2 decimal places. Leave no answers blank. Enter zero if applicable.) Costs (in Tax Inventory Material: thousands) $ 8,300 530 $ Salaries: 14,200 Mulch and packaging Administrative supplies Factory labor Sales & advertising Administration Factory Offices Factory Offices Total 2,490.00 39.75 4,260.00 0.00 607.50 2,280.00 292.50 3,765.00 157.50 13,892.25 6,650 8,100 7,600 3,900 12,550 2,100 Property taxes: Depreciation: $ Explanation The costs of selling, advertising, and research are not required to be allocated to inventory under UNICAP. Direct costs (material, labor, taxes, and depreciation) are allocated to inventory according to the level of ending inventory (30%). In contrast, indirect costs (administration) are first allocated by time spent (25%) and then according to the level of ending inventory

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