Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $910. Selected data for the companys operations last year follow:

Units in beginning inventory 0
Units produced 310
Units sold 280
Units in ending inventory 30
Variable costs per unit:
Direct materials $ 130
Direct labor $ 350
Variable manufacturing overhead $ 50
Variable selling and administrative $ 40
Fixed costs:
Fixed manufacturing overhead $ 62,000
Fixed selling and administrative $

26,000

The absorption costing income statement prepared by the companys accountant for last year appears below:

Sales $ 254,800
Cost of goods sold 204,400
Gross margin 50,400
Selling and administrative expense 37,200
Net operating income $ 13,200

Required:
1.

Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.

2. Prepare an income statement for the year using variable costing.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Basic Accounting Auditing Concepts Internal Auditing And Guiding

Authors: Bertram Bessette

1st Edition

B09PMFWVSJ, 979-8796265253

More Books

Students also viewed these Accounting questions

Question

Solve. 9 = 4x - 8

Answered: 1 week ago