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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. 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: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ $ $ $ $ 0 250 230 20 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 227,700 186,300 41,400 34,750 6,650 145 365 40 25 $ 65,000 $ 29,000 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. 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: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ $ $ $ $ 0 250 230 20 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 227,700 186,300 41,400 34,750 6,650 145 365 40 25 $ 65,000 $ 29,000 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. 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: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ $ $ $ $ 0 250 230 20 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 227,700 186,300 41,400 34,750 6,650 145 365 40 25 $ 65,000 $ 29,000 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.
Transcribed Image Text:Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. 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: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ $ $ $ $ 0 250 230 20 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 227,700 186,300 41,400 34,750 6,650 145 365 40 25 $ 65,000 $ 29,000 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.
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