Your Work- Google Chrome mheducation.com/hm.tpx Ida Sidha Karya Company is a fam

Question

Your Work- Google Chrome mheducation.com/hm.tpx Ida Sidha Karya Company is a family-owned company located in the village of Giany ar on the island of Bali in Indonesia. The company produces a handcrafted Balinese music al instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company's operations last year follow Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit 280 240 40 Direct materials Direct labor Variable manufacturing overhead Vaniable selling and administrative S 115 S 335 S 35 S 25 Fixed costs Fixed manufacturing overhead Fixed selling and administrative $ 63.000 $ 23,000 The absorption costing income statement prepared by the company's accountant for last year appears below Sales Cost of goods sold $ 211.200 170,400 Gross margin Selling and administrative expense 40.800 29,000 Net operating income $ 11,800 Required: 1. Determine how much of the ending inventory consists of fixed manufac turing overhead cost deferred in inventory to the next period g overthead in ending inventory S 63,000x l fixed m 2 Prepare an income statement for the year using variable costing Ida Sidha Karya Company Variable Costing Income Statement Sales Variable expenses 211,200 (27,600)x (80,400)X Fixed manufacturing overhead Fixed selling and administrative (108,000)

Explanation / Answer

1.

Fixed manufacturing overhead cost per unit=63000/280=225 per unit

Fixed manufacturing overhead cost deffered in inventory to next period=225×40=9000

2.

Income statement under variable costing

Variable cost of good produced

(280*(115+335+35))

Sales 211200 Less variable cost of good sold:

Variable cost of good produced

(280*(115+335+35))

135800 Less closing inventory(40×485) (19400) 116400 Gross contribution margin 94800 Less variable selling& administration(240×25) 6000 88800 Less period cost: Fixed manufacturing overhead 63000 Fixed selling&administration 23000 86000 Net operating income 2800

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