Ida Sidha Karya Company is a family-owned company located in the village of Gian
ID: 2417760 • Letter: I
Question
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 $950. Selected data for the company’s operations last year follow:
25,000
The absorption costing income statement prepared by the company’s accountant for last year appears below:
Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
Units in beginning inventory 0 Units produced 250 Units sold 235 Units in ending inventory 15 Variable costs per unit: Direct materials $ 135 Direct labor $ 345 Variable manufacturing overhead $ 30 Variable selling and administrative $ 20 Fixed costs: Fixed manufacturing overhead $ 65,000 Fixed selling and administrative $25,000
Explanation / Answer
Answer 1
(135 +345 +30 *)235 + 65000 - 180950 =>$3900
Ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period => $3900
Answer2
Direct materials => $135
Direct labor => $345
Variable manufacturing overhead => $30
TOTAL => $510
Income statement for the year using variable costing.
PARTICULARS AMOUNT ($) AMOUNT ($) SALES 223250 Less variable cost of goods sold: 0 Add v. cost of goods manufactured (250 * $510) 127500 Available for sale 127500 Less : Closing Inventory ( 15 * $510) 7650 119850 Gross contribution margin 103400 Less variable selling and administrative expenses 4700 Contribution margin 98700 Less fixed expenses: Fixed manufacturing overhead 65000 Fixed selling and administrative 25000 90000 Net operating income 8700Related Questions
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