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Ida sidha karya company is a family

03/05/2021 Client: muhammad11 Deadline: 2 Day

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 company’s operations last year follow:

Units in beginning inventory

0

Units produced

240

Units sold

225

Units in ending inventory

15

Variable costs per unit:

Direct materials

$140

Direct labor

$360

Variable manufacturing overhead

$35

Variable selling and administrative

$20

Fixed costs:

Fixed manufacturing overhead

$66,000

Fixed selling and administrative

$28,000

The absorption costing income statement prepared by the company’s accountant for last year appears below: Sales

Sales

$220,500

Cost of goods sold

182,250

Gross margin

38,250

Selling and administrative expense

32,500

Net operating income

$ 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?

Fixed manufacturing overhead cost included in inventory

Prepare an income statement for last year using variable costing.

Ida Sidha Karya Company

Variable Costing Income Statement

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