tml ework, Ch 6 Ida Sidha Karya Company is a family-owne d company located in th

Question

tml ework, Ch 6 Ida Sidha Karya Company is a family-owne d company located in the village of Glanyar on the island of Ball in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910. Selected data for the company's operations last year follow ory Units sold 270 Units in ending inventory Variable costs per unit: S 148 Direct labor Variable selling and administrative Fixed selling and. administrative $350 15 s 69,000 Fixed costs: s 26,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Cost of goods sold Gross margin Selling and administrative expense s 245, 78e 203,8s0 41,850 30,050 $11,80e

Explanation / Answer

1. Fixed manufacturing overhead deferred in ending inventory = (69000/300)*30 =6900

2. Variable costing income statement :

Sales 245700 Less: Variable cost of goods sold (525*270) (141750) Less: Variable selling and administrative expense (270*15) (4050)) Contribution margin 99900 Less: Fixed manufacturing overhead (69000) Less: Fixed selling and administrative expense (26000) Net operating income 4900

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