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Ida Sidha Karya Company is a family-owned company located in the village of Glanyar on the...

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Accounting

Ida Sidha Karya Company is a family-owned company located in thevillage of Glanyar on the island of Bali in Indonesia. The companyproduces a handcrafted Balinese musical instrument called a gamelanthat is similar to a xylophone. The gamelans are sold for $990.Selected data for the company’s operations last year follow: Unitsin beginning inventory 0 Units produced 240 Units sold 225 Units inending inventory 15 Variable costs per unit: Direct materials $ 120Direct labor $ 330 Variable manufacturing overhead $ 50 Variableselling and administrative $ 25 Fixed costs: Fixed manufacturingoverhead $ 72,000 Fixed selling and administrative $ 27,000 Theabsorption costing income statement prepared by the company’saccountant for last year appears below: Sales $ 222,750 Cost ofgoods sold 180,000 Gross margin 42,750 Selling and administrativeexpense 32,625 Net operating income $ 10,125 Required: 1. Determinehow much of the ending inventory consists of fixed manufacturingoverhead cost deferred in inventory to the next period. 2. Preparean income statement for the year using variable costing.

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4.1 Ratings (793 Votes)
Calculation of closing inventory value Particulars Per unit Remarks Direct material 120 Direct cost needs to be considered Direct labour 330 Direct cost needs to be considered Variable manufacturing overhead 50 Direct cost needs to be considered Variable selling and administrative selling    See Answer
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