Question

Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Ballinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $850. Selected data for the company's operations last year follow Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct naterials Direct labor 250 225 25 100 320 40 Variable manufacturing overhead Variable selling and adeinistrative Fixed costs: Fixed manufacturing overhead Fixed selling and adeinistrative S 20 S 6e,000 $ 20,000 Required: 1 Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. 2 Assume that the company uses variable costing. Compute the unit product cost for one gamelan. 1 Absorption costing unit product cost 2. Variable costing unit product cost Prey 1 of 1 Next> ere to search rew Bb

Answer 1

Assume Company Using Absorption Costing Calculation of Unit cost Under Absorption Costing 100 320 40 240 700 Direct Material Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Over head = Fixed MOH / Units Produced 60000/250 Absorption costing Unit Product Cost Variable Costing Calculation of Unit cost Under Variable Costing Direct Material Direct Labour Variable Manufacturing Overhead Variable costing Unit Product Cost Answers 100 320 40 460 Absorption costing UnitProduct Cost Variable costing Unit Product Cost Cost Per Unit 700 460