Ida Sidha Karya Company is a family-owned company located 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 for $981. Selected data for the company’s operations last year follow: Units in beginning inventory 0Units produced 11,000Units sold 8,000Units in ending inventory 3,000Variable costs per unit: Direct materials$200Direct labor$520Variable manufacturing overhead$60Variable selling and administrative$21Fixed costs: Fixed manufacturing overhead$670,000Fixed selling and administrative$930,000 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. 1.Absorption costing unit product cost 2.Variable costing unit product cost

Under absorption costing, fixed overhead costs of the product will be part of product costs rather…

Answered: Ida Sidha Karya Company is a…

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 Sidha Karya Company is a family-owned company located 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 for $981. Selected data for the company’s operations last year follow:


Units in beginning inventory		0
Units produced		11,000
Units sold		8,000
Units in ending inventory		3,000
Variable costs per unit:
Direct materials	$	200
Direct labor	$	520
Variable manufacturing overhead	$	60
Variable selling and administrative	$	21
Fixed costs:
Fixed manufacturing overhead	$	670,000
Fixed selling and administrative	$	930,000

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.


1.	Absorption costing unit product cost
2.	Variable costing unit product cost

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