Ida Company produces a handcrafted 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:
Units in beginning inventory 0
Units produced 250
Units sold 230
Units in ending inventory 20
Variable costs per unit:
Direct materials \$125
Direct labor \$335
Variable manufacturing overhead \$55
Variable selling and administrative \$30
Fixed costs:
Fixed manufacturing overhead \$75,000
Fixed selling and administrative \$15,000
The absorption costing income statement prepared by the company's accountant for last year appears below:
Sales \$218,500
Cost of goods sold 187,450
Gross margin 31,050
Selling and administrative expense 21,900
Net operating income \$9,150
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. NOTE: You will have a BLANK LINE prior to your cost totals on the income statement to format correctly in the Connect system.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year?
Fixed manufacturing overhead cost included in inventory
