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 $850. Selected data for the company’s operations last year follow:
Units in beginning inventory.... 0
Units produced....................... 250
Units sold............................... 225
Units in ending inventory....... 25
Variable costs per unit:
Direct Materials.................... $100
Direct Labor......................... $320
Variable Manufacturing overhead $ 40
Variable selling & administrative $ 20
Fixed Costs:
Fixed Manufacturing Overhead... $60,000
Fixed selling & administrative..... $20,000
Required:
Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
Assume that the company uses variable costing. Compute the unit product cost for one gamelan