Exercise $10-10$A $($Algo$)$ Identifying upstream and downstream costs LO $10-4$

During Year $2,$ Fanning Manufacturing Company incurred $$77,900,000$ of research and development $($R&D$)$ costs to create a long$-$life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in Year $2.$ Manufacturing costs $($direct materials, direct labor, and overhead$)$ are expected to be $$62$ per unit. Packaging, shipping, and sales commissions are expected to be $$15$ per unit. Fanning expects to sell $1,900,000$ batteries before new research renders the battery design technologically obsolete. During Year $2,$ Fanning made $450,000$ batteries and sold $399,000$ of them.

Required

a$.$ Identify the upstream and downstream costs.

b$.$ Determine the Year $2$ amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP.

c$.$ Determine the sales price assuming that Fanning desires to earn a profit margin that is equal to $30$ percent of the total cost of developing, making, and distributing the batteries.

d$.$ Prepare a GAAP$-$based income statement for Year $2.$ Use the sales price developed in Requirement $c.$

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Required D

Identify the upstream and downstream costs.

Research and development

Packaging

Shipping

Sales commissions

Please answer A$-$B$-$C$-$D thanks so much