Solutions Chapter 7

Solutions Chapter 7 - Exercise71

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Exercise 7-1   (Note: All currency values are in thousands of rupiah.) 1. Under absorption costing, all manufacturing costs (variable and  fixed) are included in product costs. Direct materials. .............................................................. Rp100 Direct labor. ..................................................................... 320 Variable manufacturing overhead. ................................... 40 Fixed manufacturing overhead (Rp60,000 ÷ 250 units). .         240     Unit product cost. ............................................................ Rp700 2. Under variable costing, only the variable manufacturing costs  are included in product costs. Direct materials. .............................................................. Rp100 Direct labor. ..................................................................... 320 Variable manufacturing overhead. ...................................           40     Unit product cost. ............................................................ Rp46 0 Note that selling and administrative expenses are not treated as  product costs under either absorption or variable costing; that is,  they are not included in the costs that are inventoried. These  expenses are always treated as period costs and are charged  against the current period’s revenue.
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Exercise 7-2   (Note: All currency values are in thousands of rupiah.) 1. 25 units × Rp240 per unit fixed manufacturing overhead per unit  = Rp6,000 2. The variable costing income statement appears below: Sales. ............................................................... Rp191,250 Variable expenses: Variable cost of goods sold: Beginning inventory. ................................... Rp
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Solutions Chapter 7 - Exercise71

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