Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city's crowded streets that it sells for 717 rupees. (Indian currency is denominated in rupees, denoted by Picture.) Selected data for the company's operations last year follow:
Units in beginning inventory 0
Units produced 21,000
Units sold 19,000
Units in ending inventory 2,000
Variable costs per unit:
Direct materials Picture 140
Direct labor Picture 370
Variable manufacturing overhead Picture 47
Variable selling and administrative Picture 23
Fixed costs:
Fixed manufacturing overhead Picture 850,000
Fixed selling and administrative Picture 730,000
Required:
1.Assume that the company uses absorption costing. Compute the unit product cost for one bicycle.