Question

Fixed Manufacturing overhead

Fixed Selling and administrative expense

sales

Units in Beginning inventory

Units produced

Units Sold

Variable Cost of Goods Sold

variable selling and administrative expense

Ida Sidha Karya Company is a family-owned company located on the Island of Ball In Indonesia. The company produces a handcrafted Balinese musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company's operations last year follow: 3.07 points Skipped 246 40 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 115 335 eBook $ 35 Hint $ 63,00 $ 23,00 Print The absorption costing Income statement prepared by the company's accountant for last year appears below: References $ Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income 211,200 170,400 40,800 29,800 11,800 $ Required: 1. Under absorption costing, how much fixed manufacturing overhead cost Is Included in the company's Inventory at the end of last year? 2. Prepare an Income statement for last year using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for last year using variable costing. Ida Sidha Karya Company Variable Costing Income Statement < Required 1 Required 2)

Answer 1

Answer 1. Gylylation of Fixed Manufacturing overhead Coit is included in company's inventory at the end of 1951 year under Absorbtion costing method. Absorbtion costing . In Absorbtion costing method, Fixed Costs are allocated on the bysis of total units sold during the period. They are not allocated full, that would be shown in Variable costing method. i. Given units produced 280 ugibs Units soll .240 units. Fixed many hcly 199 Overbeq $ Good . Fixed many factuving Overhead under Absorbtion - $ 63000 x Giting 240 units 280 47 160 • $ 54000. . In Absorbtion costing method, $54000 is the total fixed many fuckini- ng overheat cost which is included in the company's inventory at the end of last year.

2. Preparation of Income Statement for last year using vorigble. Costing under. Variable costing method, fixes (ost are qsumed irrelevant of production. units ant sales. The approach in this method is that fixed costs are incurred even if polyction happens or not so, they recognize whole fixed costu yt one time rather than to 1911ocate like absorbtion costing methol. . Ila silliq karya company Income Statement for the 195t year ynder Uqulable costing - Particulars. Tamt. Ambico. Sales ($880 X 240 units) 2)1200 - Variable costs ., Direct Material ($115 X 240 units). 27600 Direct Labour ($335 X 24oynics) 80400 Varigble Magyfacturing Outubroid 8400 C$35 X 3404nits) Variable selling and Arjoilrative costs 6000 ($25 X 240 units) (122400) contribution Margia 88800 Fixei (osts Fixed magyfy ctyring Overhe po . 52000 230091! (86000) Fixed sessing and Alministeativecost Net operating Income 2.zoo