Business, 24.03.2020 21:08 dbzrules02

Ida Sidha Karya Company is a family-owned company located in the village of Glanyar 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. Assume that the company uses absorption costing.

Units in beginning inventory 0
Units produced 14,000
Units sold 12,000
Units in ending inventory 4,000
Variable costs per unit:
Direct materials $100
Direct labor $320
Variable manufacturing overhead $40
Variable selling and administrative $20
Fixed costs:
Fixed manufacturing overhead $660,000
Fixed selling and administrative $720,000

Required:
a. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
b. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.

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Ida Sidha Karya Company is a family-owned company located in the village of Glanyar on the island of...

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