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EXERCISE 6-1 Variable and Absorption Costing Unit Product Costs [L01] Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle...

EXERCISE 6-1 Variable and Absorption Costing Unit Product Costs (L011 

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 Axed selling and administrative  8400,000 

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.22222222.jpg

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EXERCISE 6-1 Variable and Absorption Costing Unit Product Costs [L01] 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. (lndian currency is denominated in rupees, denoted by R.) Selected data lor the company's operations last year follow: Ul'IflI I1 Dunning Imnbry ................. it
Until produood ........................... 10.000
Lll'lflI sold ............................... 3.000
Unila in ending Inventory .................... 2.000
W m per unit: Dina mahrialn ......................... F1120 Bind labor ............................ H149 W Wm mom ........... H50 W IIIII'Io Ind ”11an .......... H20
and m: Fixed mummy DIN-HIDE! ............. Honopoo Fixed soilru and ldmhblntiw ............ manna 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.

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