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

  

Required:

1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.(Round your intermediate calculations and final answer to nearest whole dollars.)

Unit Product Cost: ________

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

Unit Product Cost: _______

Units in beginning inventory 0 Units produced 16,000 Units sold 13,000 Units in ending inventory 3,000 Variable costs per unit: Direct materials $     200 Direct labor $     420 Variable manufacturing overhead $      59 Variable selling and administrative $      19 Fixed costs: Fixed manufacturing overhead $ 820,000 Fixed selling and administrative $ 740,000

Explanation / Answer

1 Direct materials 200 Direct labor 420 Variable manufacturing overhead 59 Fixed manufacturing overhead 51 =820000/16000 Unit Product Cost 730 2 Direct materials 200 Direct labor 420 Variable manufacturing overhead 59 Unit Product Cost 679

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