Ida Company produces a handcrafted musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $950. 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 250 230 20 $125 $ 335 $ 55 $ 30 $ 75,000 $ 15,000 The absorption costing Income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold $ 218,500 187,450 Gross margin Selling and administrative expense Net operating income Required: 31,050 21,900 $ 9,150 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 Prepare an income statement for last year using variable costing. Sales Variable expenses: Ida Company Variable Costing Income Statement $ 218,500 $ 75,000 15,000 $ 12,650 $ 6,900 109,550 Contribution margin 108,950 0 Net operating income $ 108,950 Prev 2 of 6
Ida Company produces a handcrafted musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $950. 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 250 230 20 $125 $ 335 $ 55 $ 30 $ 75,000 $ 15,000 The absorption costing Income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold $ 218,500 187,450 Gross margin Selling and administrative expense Net operating income Required: 31,050 21,900 $ 9,150 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 Prepare an income statement for last year using variable costing. Sales Variable expenses: Ida Company Variable Costing Income Statement $ 218,500 $ 75,000 15,000 $ 12,650 $ 6,900 109,550 Contribution margin 108,950 0 Net operating income $ 108,950 Prev 2 of 6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
hr.8
Transcribed Image Text:Ida Company produces a handcrafted musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for
$950. 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
250
230
20
$125
$ 335
$ 55
$ 30
$ 75,000
$ 15,000
The absorption costing Income statement prepared by the company's accountant for last year appears below:
Sales
Cost of goods sold
$ 218,500
187,450
Gross margin
Selling and administrative expense
Net operating income
Required:
31,050
21,900
$ 9,150
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
Prepare an income statement for last year using variable costing.
Sales
Variable expenses:
Ida Company
Variable Costing Income Statement
$
218,500
$
75,000
15,000
$
12,650
$
6,900
109,550
Contribution margin
108,950
0
Net operating income
$
108,950
Prev
2 of 6
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