I can verify the part about taxes. In general once a product is produced the I
RS requires it to be valued at wholesale price rather than cost of materials
and labor. Thus, once it is produced the potential profits must be declared.
At the same time, since selling costs such as sales rep comissions discounts,
etc. have not yet been paid they can not be deducted. Another case of well
intentioned legislation not being well thought out and producing an increased
cost for consumers.