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 $910. Selected data for the company's operations last year follow:
|
|
|
| Units in beginning inventory |
|
0 |
| Units produced |
|
300 |
| Units sold |
|
270 |
| Units in ending inventory |
|
30 |
| Variable costs per unit: |
|
|
| Direct materials |
$ |
140 |
| Direct labor |
$ |
350 |
| Variable manufacturing overhead |
$ |
35 |
| Variable selling and administrative |
$ |
15 |
| Fixed costs: |
|
|
| Fixed manufacturing overhead |
$ |
69,000 |
| Fixed selling and administrative |
$ |
26,000
|
|
|
The absorption costing income statement prepared by the company's accountant for last year appears below:
|
|
|
|
| Sales |
$ |
245,700 |
| Cost of goods sold |
|
203,850 |
|
|
|
| Gross margin |
|
41,850 |
| Selling and administrative expense |
|
30,050 |
|
|
|
| Net operating income |
$ |
11,800 |
|
|
|
|
| 1. |
Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
Total fixed manufacturing overhead in ending inventory: ____
| 2. |
Prepare an income statement for the year using variable costing. |
|