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 that is similar to a xylophone. The gamelans are sold for $780. Selected data for the companys operations last year follow:
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| Units in beginning inventory |
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0 |
| Units produced |
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24,000 |
| Units sold |
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21,000 |
| Units in ending inventory |
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3,000 |
| Variable costs per unit: |
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| Direct materials |
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$ 160 |
| Direct labor |
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$ 400 |
| Variable manufacturing overhead |
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$ 61 |
| Variable selling and administrative |
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$ 21 |
| Fixed costs: |
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| Fixed manufacturing overhead |
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$ 700,000 |
| Fixed selling and administrative |
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$ 530,000 |
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1)Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
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2)Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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