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EXAMPLE Bharat Bicycle, located in India, produces an inexpensive yet rugged bicycle for use on crowded city streets. The company sells the bicycle for 500
EXAMPLE Bharat Bicycle, located in India, produces an inexpensive yet rugged bicycle for use on crowded city streets. The company sells the bicycle for 500 rupees, (Indian currency is denominated in rupees, denoted by R.) Selected data for the company's operations last year follow 0 Units in beginning inventory.. Units produced 10,000 Units sold 8.000 Units in onding inventory 2000 Variable costs per unit Direct materials R120 Direct labour. R10 Varioble manufacturing overhoad R50 Variable setting and administrativo R20 Fixed costs Fored manufacturing verhood R600.000 Food selling and utministrative R400.000 Required 1. Assume that the company uses absorption costing Compute the unit product cost for one bicycle 2. Assume that the company uses variable costing Compute the unit product cost for one bicycle 3 Compute net operating income using both absorption and variable costing notes
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