Prepare income statement for the year using variable costing

Assignment Help Financial Accounting

Reference no: EM131247511

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 $950. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 270 Units sold 235 Units in ending inventory 35 Variable costs per unit: Direct materials $ 110 Direct labor $ 330 Variable manufacturing overhead $ 30 Variable selling and administrative $ 20 Fixed costs: Fixed manufacturing overhead $ 81,000 Fixed selling and administrative $ 22,000 The absorption costing income statement prepared by the company’s accountant for last year appears below: Sales $ 223,250 Cost of goods sold 180,950 Gross margin 42,300 Selling and administrative expense 26,700 Net operating income $ 15,600 Required: 1. Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period. 2. Prepare an income statement for the year using variable costing.

Reference no: EM131247511

Questions Cloud

Record journal entries in the order presented in the problem : On July 1, 2017, Oriole Co. pays $16,140 to Waterway Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. For Oriole Co., journalize the entry on July 1 and the adjusting entry on December 31. Record journ..

The par value method and constructive retirement method : When stock of the company is purchased, treasury stock, three methods are available to record this transaction: the cost method, the par value method, and the constructive retirement method. Discuss the following: The difference between the cost, par..

Find the ending balance in the inventory accounts : Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments: Raw materials $ 618,000 Work in process—Blending Department $ 65,000 Finished goods $ 20,000 After post..

Prepare income statement for the year using variable costing : 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. Determine how much..

Prepare the journal entries to record raw materials purchase : Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the Mar..

What is the company predetermined overhead rate : Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the Mar..

What is the contribution margin ratio : Olso Company prepared the following contribution format income statement based on a sales volume of 1,000 units. what is the contribution margin per unit. what is the contribution margin ratio?

The amount of federal income tax withheld from her earnings : Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate of .6% and the SUTA t..

User Account

All Pages