PLEASE SHOW ALL WORK!!! thank you! lda Sidha Karya Company is a family-owned com
ID: 2334315 • Letter: P
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PLEASE SHOW ALL WORK!!! thank you!
lda 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 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 unit: 300 265 35 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 115 $ 325 45 20 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 72,000 $ 34,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 241,150 192,12!5 49,025 39,300 $9,725 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 costingExplanation / Answer
(1)
Total Fixed Mfr O/H
72000
Mfr O/H Per Unit (72000/300 units) (A)
240
Ending Inventory (B)
35
Fixed Mfr O/H for 35 Units (A * B)
$8400
(2) Income Statement :-
Sales
241150
Variable Expenses :-
Direct Materials (265 * 115)
30475
Direct Labour (265 * 325)
86125
Manufacturing O/H (265 * 45)
11925
Selling & Adm Exp (265 * 20)
5300
133825
Contribution Margin
107325
Fixed Expenses:-
Fixed Mfr O/H
72000
Fixed Selling & Admn
34000
106000
Net Operating Income
1325
Total Fixed Mfr O/H
72000
Mfr O/H Per Unit (72000/300 units) (A)
240
Ending Inventory (B)
35
Fixed Mfr O/H for 35 Units (A * B)
$8400
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