Karya Company produces a handcrafted Balinese musical instrument called gamelan. The gamelans are sold for RM850. Selected data for the company’s operations last year are as follow: Units in beginning inventory 0 Units produced 250 Units sold 225 Units in ending inventory 25 Variable costs per unit: Direct materials RM100 Direct labour RM320 Variable manufacturing overhead RM40 Variable selling and administrative RM20 Fixed costs: Fixed manufacturing overhead RM60,000 Fixed selling and administrative RM20,000 Required: Assume that the company uses absorption costing: Compute the unit product cost. (2 marks) Prepare an income statement for the year.
Karya Company produces a handcrafted Balinese musical instrument called gamelan. The gamelans are sold for RM850. Selected data for the company’s operations last year are as follow: Units in beginning inventory 0 Units produced 250 Units sold 225 Units in ending inventory 25 Variable costs per unit: Direct materials RM100 Direct labour RM320 Variable manufacturing overhead RM40 Variable selling and administrative RM20 Fixed costs: Fixed manufacturing overhead RM60,000 Fixed selling and administrative RM20,000 Required: Assume that the company uses absorption costing: Compute the unit product cost. (2 marks) Prepare an income statement for the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
marks)
Karya Company produces a handcrafted Balinese musical instrument called gamelan. The gamelans are sold for RM850. Selected data for the company’s operations last year are as follow:
|
Units in beginning inventory |
0 |
|
|
Units produced |
250 |
|
|
Units sold |
225 |
|
|
Units in ending inventory |
25 |
|
|
|
|
|
|
Variable costs per unit: |
|
|
|
|
Direct materials |
RM100 |
|
|
Direct labour |
RM320 |
|
|
Variable manufacturing |
RM40 |
|
|
Variable selling and administrative |
RM20 |
|
|
|
|
|
Fixed costs: |
|
|
|
|
Fixed manufacturing overhead |
RM60,000 |
|
|
Fixed selling and administrative |
RM20,000 |
Required:
- Assume that the company uses absorption costing:
- Compute the unit product cost.
(2 marks)
- Prepare an income statement for the year.
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