Question: Distant Ride, Inc. develops and makes a battery for electrical cars. The manufacturing costs per unit include $450 direct materials, $180 direct labor and $300

Distant Ride, Inc. develops and makes a battery for electrical cars. The manufacturing costs per unit include $450 direct materials, $180 direct labor and $300 manufacturing overhead. These costs are based on a production and sales volume of 5,000 units per year. Advertising costs amounted to $400,000. Product design cost for the battery amounted $520,000. Companywide administrative costs amounted to $250,000. Research and development on battery technology amount to $1,800,000. Distant Ride's management team established the sales price at 160 percent of GAAP-defined product cost.

Required

a. Determine the total amount of upstream costs.

b. Determine the total amount of downstream costs.

c. Determine the total amount of midstream costs.

d. Determine the sales price per unit.

e. Prepare a GAAP-based income statement.

f. Provide a plausible explanation as to why the company incurred the loss shown on the income statement prepared to satisfy Requirement e.

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a Upstream costs 520000 product design 1800000 research and development 2320000 b Downstream costs 4... View full answer

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