Question

Check my work Ida Sidha Karya Company is a family-owned company located 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 $980. Selected data for the company's operations last year follow: 280 265 15 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 150 370 45 30 $ 70,000 $ 30,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 259, 700 215,975 43,725 37,950 $ 5,775

Answer 1

Fixed Manufacturing Overhead	$70,000
Units Produced	280
Fixed Manufacturing Overhead Unit Cost	$250
Ending Inventory	15
Fixed Manufacturing Overhead included in the inventory at the end of year	$3,750

Ida Sidha Karya Company
Income statement - Variable costing
Sales revenue (980*265)		$    259,700
Less: variable expense
Cost of goods sold (265*(150+370+45))	$ 149,725
Variable Selling expense (65*30)	$     7,950
Total variable expense		$    157,675
Contribution margin		$    102,025
Less: Fixed expense (70000+30000)		$    100,000
Net income		$        2,025