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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 to a Canadian importer for $1,034. Selected data for the companys operations last year follow: Units in beginning inventory 0 Units produced 11,000 Units sold 8,000 Units in ending inventory 3,000 Variable costs per unit: Direct materials $ 280 Direct labour $ 490 Variable manufacturing overhead $ 56 Variable selling and administrative $ 18 Fixed costs: Fixed manufacturing overhead $ 750,000 Fixed selling and administrative $ 810,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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 to a Canadian importer for $1,034. Selected data for the companys operations last year follow:
Units in beginning inventory 0
Units produced 11,000
Units sold 8,000
Units in ending inventory 3,000
Variable costs per unit:
Direct materials $ 280
Direct labour $ 490
Variable manufacturing overhead $ 56
Variable selling and administrative $ 18
Fixed costs:
Fixed manufacturing overhead $ 750,000
Fixed selling and administrative $ 810,000
Required:
1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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