1.)Compute the unit product costs for one gamelan if company uses absorption cos
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Question
1.)Compute the unit product costs for one gamelan if company uses absorption costing and variable costing.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. The gamelans are sold for 850 (thousand) rupiahs. (The currency in Indonesisa is the rupiah, which is denoted by Rp.) Selected data for the company's operations last year follow (all currency values are in thousands of rupiahs):
Units in beginning inventory = 0
Units produced = 250
Units sold = 225
Units in ending inventory = 25
Variable costs per unit:
Direct materials = Rp 100
Direct labor = Rp 320
Variable manufacturing overhead = Rp 40
Variable selling and administrative = Rp 20
Fixed costs:
Fixed manufacturing overhead = Rp 60,000
Fixed selling and administrative = Rp 20,000
Explanation / Answer
Variable and absorption costing unit product costs: Cost type Absorprtion costing Variable costing Direct material Rp 100 Rp 100 Direct labor 320 320 Variable manufacturing overhead 40 40 Fixed manufacturing overhead 240 0 (60,000 / 250) Manufacturing cost per unit Rp700 Rp 460 Cost type Absorprtion costing Variable costing Direct material Rp 100 Rp 100 Direct labor 320 320 Variable manufacturing overhead 40 40 Fixed manufacturing overhead 240 0 (60,000 / 250) Manufacturing cost per unit Rp700 Rp 460 So the unit product costs under; Variable costing = Rp 460 per unit Absorption costing = Rp 700 per unit. Cost type Absorprtion costing Variable costing Direct material Rp 100 Rp 100 Direct labor 320 320 Variable manufacturing overhead 40 40 Fixed manufacturing overhead 240 0 (60,000 / 250) Manufacturing cost per unit Rp700 Rp 460Related Questions
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