Ida Sidha Karya Company is a family-owned company located in the village of Glan

Question

Ida Sidha Karya Company is a family-owned company located in the village of Glanyar 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 $850. Selected data for the company’s operations last year follow:

  

  

Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.

     

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 Glanyar 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 $850. Selected data for the company’s operations last year follow:

Explanation / Answer

1.

2.

Computation of Unit Product Cost Absorption Costing Direct Meterial $                                100 Direct Labour $                                320 Variable Manufactoring Overhead $                                  40 Fixed Manufactoring Overhead ($60,000/250) $                                240 Unit Product Cost $                                700

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