Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $960. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold 230 200 Units in ending inventory Variable costs per unit: Direct materials 30 %24 110 Direct labor 320 Variable manufacturing overhead Variable selling and administrative Fixed costs: 30 10 Fixed manufacturing overhead Fixed selling and administrative $ 69,000 $ 27,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 192,000 152,000 Sales Cost of goods sold Gross margin Selling and administrative expense 40,000 29,000 Net operating income 11,000 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 $960. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold 230 200 Units in ending inventory Variable costs per unit: Direct materials 30 %24 110 Direct labor 320 Variable manufacturing overhead Variable selling and administrative Fixed costs: 30 10 Fixed manufacturing overhead Fixed selling and administrative $ 69,000 $ 27,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 192,000 152,000 Sales Cost of goods sold Gross margin Selling and administrative expense 40,000 29,000 Net operating income 11,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Fixed selling and administrative
$ 27,000
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
$ 192,000
152,000
40,000
29,000
Net operating income
$
11,000
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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of
last year?
Fixed manufacturing overhead cost included in inventory
Requied 1
Required 2 >
bloxt
Transcribed Image Text:Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for
$960. Selected data for the company's operations last year follow:
Units in beginning inventory
Units produced
Units sold
230
200
Units in ending inventory
Variable
30
costs per unit:
Direct materials
Direct labor
$4
%24
$4
110
320
Variable manufacturing overhead
Variable selling and administrative
Fixed costs:
30
10
Fixed manufacturing overhead
Fixed selling and administrative
$ 69,000
$ 27,000
The absorption costing income statement prepared by the company's accountant for last year appears below:
$ 192,000
152,000
Sales
Cost of goods sold
Gross margin
Selling and administrative expense
40,000
29,000
Net operating income
11,000
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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of
last year?
Fixed manufacturing overhead cost included in inventory
Required 2 >
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