Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $742. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 24,000 Units sold 20,000 Units in ending inventory 4,000 Variable costs per unit: Direct materials $ 200 Direct labor $ 350 Variable manufacturing overhead $ 52 Variable selling and administrative $ 23 Fixed costs: Fixed manufacturing overhead $ 720,000 Fixed selling and administrative $ 840,000 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
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $742. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 24,000 Units sold 20,000 Units in ending inventory 4,000 Variable costs per unit: Direct materials $ 200 Direct labor $ 350 Variable manufacturing overhead $ 52 Variable selling and administrative $ 23 Fixed costs: Fixed manufacturing overhead $ 720,000 Fixed selling and administrative $ 840,000 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
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $742. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 24,000 Units sold 20,000 Units in ending inventory 4,000 Variable costs per unit: Direct materials $ 200 Direct labor $ 350 Variable manufacturing overhead $ 52 Variable selling and administrative $ 23 Fixed costs: Fixed manufacturing overhead $ 720,000 Fixed selling and administrative $ 840,000 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
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $742. Selected data for the company’s operations last year follow:
Units in beginning inventory
0
Units produced
24,000
Units sold
20,000
Units in ending inventory
4,000
Variable costs per unit:
Direct materials
$
200
Direct labor
$
350
Variable manufacturing overhead
$
52
Variable selling and administrative
$
23
Fixed costs:
Fixed manufacturing overhead
$
720,000
Fixed selling and administrative
$
840,000
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.
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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