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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 $902. Selected data for the company's operations last year follow:
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Units in beginning inventory
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0
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Units produced
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15,000
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Units sold
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13,000
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Units in ending inventory
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2,000
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Variable costs per unit:
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Direct materials
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$ 280
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Direct labor
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$ 390
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Variable manufacturing overhead
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$ 56
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Variable selling and administrative
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$ 23
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Fixed costs:
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Fixed manufacturing overhead
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$ 840,000
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Fixed selling and administrative
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$ 940,000
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Required:
1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.