Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for$840. Selected data for the company's operations last year follow:Units in beginning inventoryUnits producedUnits soldUnits in ending inventoryVariable costs per unit:Direct materialsDirect laborVariable manufacturing overheadVariable selling and administrativeFixed costs:Fixed manufacturing overheadFixed selling and administrativeThe absorption costing income statement prepaSalesCost of goods soldGross marginSelling and administrative expenseNet operating income030027525$ 100$310$ 30$ 35$ 66,000$ 31,000by the company's accountant for last year appears below:$ 231,000181,50049,50040,625$ 8,875Required:1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of lastyear?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 $840. 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 0 300 275 25 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 100 $ 310 $ 30 $ 35 $ 66,000 $ 31,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 231,000 181,500 49,500 40, 625 $ 8,875 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 $840. 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 0 300 275 25 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 100 $ 310 $ 30 $ 35 $ 66,000 $ 31,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 231,000 181,500 49,500 40, 625 $ 8,875 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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22. Subject :- Accounting
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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 $917. 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 0 13,000 9,000 4,000 1. Absorption costing unit product cost 2. Variable costing unit product cost $ 210 $ 440 $ 58 $18 $ 770,000 $ 550,000 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.
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