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 n Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $885 Selected data for the company's operatons last year follow Units in beginning inventory Units sokd Units in ending inventory Vanable costs per unit 23.000 19,000 4 000 Diroct materials Direct labor Variable seling and administralive Fixed manufacturing overhead $ 270 370 5 56 $ 19 Fxnd costs 920,000 $ 670,000 Fixnd seling and administrative Required: 1. Assume that the company uses absorption costing Compute the unt product cast for anie gamelan 2 Assume thst the company uses variable costing Compune the unt product cost for one gamelan

Explanation / Answer

1.Computation of unit product cost under absorption costing

Direct Material $ 270

Direct Labour $ 370

Variable Manufacturing overhead $56

Fixed Manufacturing overhead $40

Total Unit Product Cost $ 736

2. Computation of unit product cost under variable costing

Direct Material $ 270

Direct Labour $ 370

Variable Manufacturing overhead $56

Total Unit Product Cost $ 696

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