Q$49/$

Problem III $(4$ Points$)$

Chloe Apparel, Inc., a clothing manufacturer, has the following information with respect to its FIFO inventory and $20$X$1$ costs:

Inventory at January $1,20$X$1$

$471$ costs

$ $2,000,000$

Additional $263$A costs

$ $500000$

Total Inventory at January $1,20$X$1$

$ $2,500,000$

$20$X$1471$ Costs

Direct material

$ $5,000,000$

Direct labor

$ $3,500,000$

Indirect costs

$ $1,500,000$

Total Current Year $471$ Costs

$$10,000,000$

$20$X$1$ Additional $263$A Costs

$ $450,000$

$20$X$1$ Mixed Service Costs

$ $1,000,000$

$20$X$1$ Costs Exempt from $263$A

$ $550,000$

Inventory at December $31,20$X$1$

$471$ costs

$ $3,000,000$

Assuming Chloe uses the simplified production method and FIFO cost flow assumption:

A$.$ The amount of mixed service costs allocable to production activities is

$.$

B$.$ The $20$X$1$ absorption ratio is $.$

C$.$ Ending inventory including $263$A costs is $.$

D$.$ The net book$-$tax adjustment attributable to $263$A costs for $20$X$1$ is $[$favorable $/$ unfavorable$]$ of $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.$