Exercise 6-1 Variable and Absorption Costing Unit Product Costs [LO6-1]

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 $967. Selected data for the companys operations last year follow:

Units in beginning inventory Units produced 23,000 Units sold 21,000 2,000 Units in ending inventory Variable costs per unit 280 Direct materials 490 Direct labor 48 Variable manufacturing overhead 24 Variable selling and administrative Fixed costs 900,000 Fixed manufacturing overhead 840,000 Fixed selling and administrative Required 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. Unit product cost 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan. Unit product cost