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 Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $980. Selected data for the company's operations last year follow: 240 225 15 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 360 ta ta ta ta 20 $ 66,000 $ 28,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 220,500 182,250 38,250 32,500 $ 5,750

Answer 1

1
Fixed manufacturing overhead cost included in inventory	4125	=66000/240*15
2
Variable costing Income Statement
Sales		220500
Variable expenses:
Variable cost of goods sold	120375		=225*(140+360+35)
Variable selling and administrative expenses	4500		=225*20
		124875
Contribution margin		95625
Fixed expenses:
Fixed manufacturing overhead	66000
Fixed selling and administrative expenses	28000
		94000
Net operating income		1625