Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company’s operations last year follow: Units in beginning inventory0Units produced280Units sold240Units in ending inventory40Variable costs per unit: Direct materials$115Direct labor$ 335Variable manufacturing overhead$ 35Variable selling and administrative$ 25Fixed costs: Fixed manufacturing overhead$ 63,000Fixed selling and administrative$ 23,000 The absorption costing income statement prepared by the company’s accountant for last year appears below: Sales$ 211,200Cost of goods sold170,400Gross margin40,800Selling and administrative expense29,000Net operating income$ 11,800 Required:1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year?2. Prepare an income statement for last year using variable costing.

Fixed manufacturing overhead per unit = Total Fixed manufacturing overhead / Units produced =…

Answered: Ida Company produces a handcrafted…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company’s operations last year follow:

Units in beginning inventory	0
Units produced	280
Units sold	240
Units in ending inventory	40
Variable costs per unit:
Direct materials	$115
Direct labor	$ 335
Variable manufacturing overhead	$ 35
Variable selling and administrative	$ 25
Fixed costs:
Fixed manufacturing overhead	$ 63,000
Fixed selling and administrative	$ 23,000