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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 $902. Selected data for the company's operations last year follow:
Units in beginning inventory
0
Units produced
15,000
Units sold
13,000
Units in ending inventory
2,000
Variable costs per unit:
Direct materials
$ 280
Direct labor
$ 390
Variable manufacturing overhead
$ 56
Variable selling and administrative
$ 23
Fixed costs:
Fixed manufacturing overhead
$ 840,000
Fixed selling and administrative
$ 940,000
Required:
1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
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