Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold to a Canadian importer for $910, 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 units Direct materiale Direct labour 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 expenses Operating income An absorption costing income statement prepared by the company's accountant appears below: 0 300 270 30 $ 140 $350 $ 35 Variable expenses: $69,000 $26,000 Fixed expenses: $245,700 203,850 41,850 30,050 $11,800 Required: 1. Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period. Total and manufacturing overhead in ending Inventory 2. Prepare an income statement for the year using the variable costing method. IDA SIDHA KARYA COMPANY Variable Costing Income Statement
Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold to a Canadian importer for $910, 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 units Direct materiale Direct labour 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 expenses Operating income An absorption costing income statement prepared by the company's accountant appears below: 0 300 270 30 $ 140 $350 $ 35 Variable expenses: $69,000 $26,000 Fixed expenses: $245,700 203,850 41,850 30,050 $11,800 Required: 1. Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period. Total and manufacturing overhead in ending Inventory 2. Prepare an income statement for the year using the variable costing method. IDA SIDHA KARYA COMPANY Variable Costing Income Statement
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company
produces a handcrafted Balinese musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold to a
Canadian importer for $910. 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 units
Direct materiale
Direct labour
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 expenses
Operating income
$
$
$
An absorption costing income statement prepared by the company's accountant appears below:
Variable expenses:
0
300
270
30
Fixed expenses:
140
350
35
$69,000
$26,000
$245,700
203,850
41,850
30,050
$11,800
Required:
1. Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
Total and manufacturing overhead in ending Inventory
2. Prepare an income statement for the year using the variable costing method.
IDA SIDHA KARYA COMPANY
Variable Costing Income Statement
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