1.XYZ, Inc. manufactures a tangible product and sells the product at w

1.XYZ, Inc. manufactures a tangible product and sells the product at wholesale. In it’s first year of operations, XYZ manufactured 1,000 units of product and incurred $200,000 of direct materials cost and $130,000 direct labor costs. For financial statement purposes, XYZ capitalized $85,000 indirect costs to inventory. For tax purposes, it had to capitalize an additional $45,000 in indirect and mixed service costs to inventory under 263A. At the end of year 1, XYZ held 260 units in inventory. Compute XYZ’s cost of goods sold for book and tax purposes.2. Refer to 2. above. In its second year of operations, XYZ manufactured 2,000 units of product and incurred $410,000 direct material costs and $275,000 direct labor costs. For financial statement purposes, XYZ capitalized $139,000 indirect costs to inventory. For tax purposes, it had to capitalize an additional $65,000 indirect costs to inventory under 263A. At the end of its second year, XYZ had 300 items in inventory. Compute XYZ’s cost of goods sold for book purposes and for tax purposes assuming that: XYZ uses the FIFO costing convention XYZ uses the LIFO costing convention

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