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 companys operations last year follow:
Units in beginning inventory | 0 |
| 240 |
| 225 |
Units in ending inventory | | 15 |
| |
| $140 |
| $360 |
Variable manufacturing overhead | | $35 |
Variable selling and administrative | | $20 |
| |
Fixed manufacturing overhead | | $66,000 |
Fixed selling and administrative | | $28,000 |
The absorption costing income statement prepared by the companys accountant for last year appears below:Sales
Sales | $220,500 |
| 182,250 |
| 38,250 |
Selling and administrative expense | | 32,500 |
| $ 5,750 |
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.
Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year?
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| Fixed manufacturing overhead cost included in inventory | | |
Prepare an income statement for last year using variable costing.
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| Ida Sidha Karya Company | Variable Costing Income Statement | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |