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 $910 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: 300 265 35 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative 115 $325 45 20 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 72,000 34,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 241,150 192,125 49,025 39,300 $9,725 Required:

Explanation / Answer

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2.

Units in ending iventory 35 Fixed Manufacturing Overhead ($72,000 / 300) $ 240 Fixed manufacturing overhead cost included in the company's inventory $ 8,400

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