Exercise 6-2 Variable Costing Income Statement; Explanation of Difference in Net
ID: 2542124 • Letter: E
Question
Exercise 6-2 Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO6-2]
Ida Sidha Karya Company is a family-owned company located in the village of Glanyar 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 $950. Selected data for the company’s operations last year follow:
25,000
The absorption costing income statement prepared by the company’s accountant for last year appears below:
Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
Prepare an income statement for the year using variable costing.
Ida Sidha Karya Company is a family-owned company located in the village of Glanyar 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 $950. Selected data for the company’s operations last year follow:
Explanation / Answer
1.
2.
Total Fixed manufacturing overhead 65,000 Number of units produced $ 250 Fixed manufacturing overhead per unit ($65,000/250) $ 260 Total fixed manufacturing overhead in ending inventory (15*$260) $ 3,900