1. Ida Sidha Karya Company is a family-owned company located 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 $767. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		17,000
Units sold		14,000
Units in ending inventory		3,000
Variable costs per unit:
Direct materials	$	140
Direct labor	$	420
Variable manufacturing overhead	$	48
Variable selling and administrative	$	24
Fixed costs:
Fixed manufacturing overhead	$	670,000
Fixed selling and administrative	$	640,000

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.

2. Ida Sidha Karya Company is a family-owned company located 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		300
Units sold		265
Units in ending inventory		35
Variable costs per unit:
Direct materials	$	115
Direct labor	$	325
Variable manufacturing overhead	$	45
Variable selling and administrative	$	20
Fixed costs:
Fixed manufacturing overhead	$	72,000
Fixed selling and administrative	$	34,000

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

Sales	$	241,150
Cost of goods sold		192,125
Gross margin		49,025
Selling and administrative expense		39,300
Net operating income	$	9,725

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.

3. Required information

[The following information applies to the questions displayed below.]

Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the companys most recent year is given:

							Office
	Total Company						Chicago						Minneapolis
Sales	$	450,000		100.0	%		$	90,000		100	%		$	360,000		100	%
Variable expenses		243,000		54.0	%			27,000		30	%			216,000		60	%
Contribution margin		207,000		46.0	%			63,000		70	%			144,000		40	%
Traceable fixed expenses		100,800		22.4	%			46,800		52	%			54,000		15	%
Office segment margin		106,200		23.6	%		$	16,200		18	%		$	90,000		25	%
Common fixed expenses not traceable to offices		72,000		16.0	%
Net operating income	$	34,200		7.6	%

Required:

1-a. Compute the companywide break-even point in dollar sales.

1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.

1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?