Exercise 4-1 (Algo) Variable and Absorption Costing Unit Product Costs [LO4-1]

Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $973. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	25,000
Units sold	23,000
Units in ending inventory	2,000
Variable costs per unit:
Direct materials	$ 240
Direct labor	$ 510
Variable manufacturing overhead	$ 62
Variable selling and administrative	$ 21
Fixed costs:
Fixed manufacturing overhead	$ 770,000
Fixed selling and administrative	$ 900,000

Required:

1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.

Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.

1. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.