da Sidha Karya Company is a family-owned company located in the village of Giany
ID: 2342957 • Letter: D
Question
da 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 $849. Selected data for the company’s operations last year follow:
Required:
A) 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.)
B) Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
Units in beginning inventory 0 Units produced 14,000 Units sold 12,000 Units in ending inventory 2,000 Variable costs per unit: Direct materials $ 240 Direct labor $ 400 Variable manufacturing overhead $ 53 Variable selling and administrative $ 24 Fixed costs: Fixed manufacturing overhead $ 790,000 Fixed selling and administrative $ 470,000Explanation / Answer
Absorption Costing Method Particulars Amount Direct material 240 direct labour 400 variable manufacturing overhead 53 fixed manufacturing overhead (790000/14000) 56 unit product cost $749 2) Variable costing method particulars Amount Direct material 240 direct labour 400 variable manufacturing overhead 53 unit product cost $693 Selling & administrative exp are not the part of product cost
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