Exercise 10-10A (Algo) Identifying upstream and downstream costs LO 10-4 During Year 2. Rundle Manufacturing Company incurred $131,600,000 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 $68 per unit. Packaging, shipping, and sales commissions are expected to be $17 per unit . Rundle expects to sell 2,800,000 batteries before new research renders the battery design technologically obsolete. During Year 2, Rundle made 430,000 batteries and sold 395,000 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 Rundle desires to earn a profit margin that is equal to 25 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 Requirements Complete this question by entering your answers in the tabs below. Required A Required B Required Required D c. Determine the sales price assuming that Rundle desires to earn a profit margin that is equal to 25 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 Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Identify the upstream and downstream costs. 1. Research and development 2. Packaging 3. Shipping 4. Sales commissions Reed Required B > e automat Rundle desires to eam a profit margin that is equal to 25 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 Complete this question by entering your answers in the tabs below. Required A Required B Required Required D 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 GAAR. Cost of goods sold Ending inventory Check my we c. Determine the sales price assuming that Rundle desires to earn a profit margin that is equal to 25 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 Complete this question by entering your answers in the tabs below. Required A Required B Requbod Required Determine the sales price assuring that Rundle desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and distributing the batteries. (Do not round Intermediate calculations. Round your final answer to 2 decimal places.) Sales price u per based income statement for Year 2 Use ine sales price oeveloped in requirement 5 5 Complete this question by entering your answers in the tabs below. 20 points ebook Required A Required Required Required Prepare a GAP-based income statement for Year 2. Use the sales price developed in Requirement c. (Do not round Intermediate calculations.) Hint ASH RUNDLE MANUFACTURING COMPANY Income Statement Print References Net income (105)