Question

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 sounding bars are cast from brass and hand-filed to attain just the right sound. The bars are then mounted on an intricately hand-carved wooden base. The gamelans are sold for 850 (thousand) rupiahs. (The currency in Indonesia is the rupiah, which is denoted by Rp.) Selected data for the company's operations last year follow (all currency values are in thousands of rupiahs):
(b) Assume that the company uses variable costing. Compute the unit product cost for one gamelan

Answer 1

Variable costing unit product cost  $ 779.

Manufactured merchandise is bought.

Units in beginning inventory   0  

 Units produced                         13,000  

 Units sold                                   9,000  

Units in ending inventory            4,000  

 Variable costs per unit:

   

    Direct materials                                     $ 220  

    Direct labor                                            $ 500  

    Variable manufacturing overhead       $ 59  

      Variable selling and administrative    $ 24  

 Fixed costs:    

      Fixed manufacturing overhead        $ 790,000  

      Fixed selling and administrative         $ 580,000  

1. Under absorption costing, all manufacturing costs (variable and fixed) are included in product costs.

Direct materials                                  $ 220  

 Direct labor                                       500  

 Variable manufacturing overhead       59  

 Fixed manufacturing overhead

    ($790,000 ÷ 13,000 units)             61  

Absorption costing unit product cost       $ 840  

Under variable costing, only the variable manufacturing costs are included in product costs.

Direct materials                              $ 220  

Direct labor                                  500  

Variable manufacturing overhead   59  

 

Hence, Variable costing unit product cost  $ 779.

Learn more about Company variable costing here:-brainly.com/question/6337340

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