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 $870. 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: 19,000 17,000 2,000 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative 250 420 51 21 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $740,000 $630,000 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 the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan. 1. Absorption costing unit product cost 2. Variable costing unit product cost

Explanation / Answer

Calculate unit product cost :

Absorption costing unit proudct cost Variable costing unit product cost Direct material 250 250 Direct labour 420 420 Variable manufacturing overhead 51 51 Fixed manufacturing overhead (740000/19000) 39 Unit product cost 760 721

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