Exercise 7-1 Variable and Absorption Costing Unit Product Costs (L07-13 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 $763. Selected data for the company's operations last year follow 16, eee 13, see 3.ee 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 $ 900.ee $ 55.ee Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your Intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan. Absorption costing unt product cost Variable costing unit product Cost 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 $950. Selected data for the company's operations last year follow. 235 135 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct waterials Direct labor Variable sanufacturing overhead Variable selling and administrative Fixed costs: Fixed sanufacturing overhead Fixed selling and administrative 345 $ 65, eee $ 25,000 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 223.25e 18e95e 42,3ee 29.7ee 12, see $ 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. What is the amount of the difference in net operating income between the two costing methods? Complete this question by entering your answers in the tabs below. Req 1 Req ZA Reg 28 Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? Fived manufacturing overhead cost included Req2A > Req 1 Req 2A Req ze Prepare an income statement for last year using variable costing. Ida Sidha Karya Company Variable Costing Income Statement Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Reg 28 What is the amount of the difference in net operating income between the two costing methods? Amount of the difference in net operating income
