Maurice Tutor

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    Argosy University/ Phoniex University/
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Category > Accounting Posted 24 Jul 2017 My Price 7.00

Shastri Bicycle of Bombay

Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city’s crowded streets that it sells for 500 rupees. (Indian currency is denominated in rupees, denoted by R.)
Selected data for the company’s operations last year follow:
Units in beginning inventory . . . . . . . . . . . . . . . . . . . . 0
Units produced. . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Units in ending inventory . . . . . . . . . . . . . . . . . . . 2,000
Variable costs per unit:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . R120
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . R140
Variable manufacturing overhead . . . . . . . . . . . R50
Variable selling and administrative . . . . . . . . . . R20
Fixed costs:
Fixed manufacturing overhead . . . . . . . . . . . . . R600,000
Fixed selling and administrative . . . . . . . . . . . . R400,000

Required:
1. Assume that the company uses absorption costing. Compute the unit product cost for one bicycle.
2. Assume that the company uses variable costing. Compute the unit product cost for one bicycle.

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Jul 2017 05:07 PM My Price 7.00

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