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

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 $908. 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 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 $908. Selected data for the company’s operations last year follow:

Explanation / Answer

Absorption costing Variable costing Direct Material 220 220 Direct Labour 460 460 variable Manufacturing overheads 62 62 46.19048 Fixed manufacturing expenses 46.19 Unit product cost 788.19 742 the fixed manufacturing overhead cost has not been included while computing the cost of one bike under variable costing system.

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