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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 $893. Selected data for the company’s operations last year follow: Units in beginning inventory 0Units produced 14,000Units sold 12,000Units in ending inventory 2,000Variable costs per unit: Direct materials $ 150Direct labor $ 510Variable manufacturing overhead $ 47Variable selling and administrative $ 21Fixed costs: Fixed manufacturing overhead $ 640,000Fixed selling and administrative $ 770,000 Required:1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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