Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city's crowded streets that it sells for 792 rupees.
- Units in beginning inventory 0
- Units produced 17,000
- Units sold 14,000
- Units in ending inventory 3,000
- Variable costs per unit:
- Direct materials R 240
- Direct labor R 320
- Variable manufacturing overhead R 50
- Variable selling and administrative R 21
- Fixed costs:
- Fixed manufacturing overhead R 720,000
- Fixed selling and administrative R 870,000
1. Assume that the company uses absorption costing. Compute the unit product cost for one bicycle. (Round your intermediate and final answers to the nearest whole number.)
2. Assume that the company uses variable costing. Compute the unit product cost for one bicycle.