Shastri Bicycle of Bombay, India, produces an inexpensive, yet rugged, bicycle for use on the city’s crowded streets that it sells for 930 rupees. (Indian currency is denominated in rupees, denoted by Picture.) Selected data for the company’s operations last year follow:

Question

Units in beginning inventory 0
Units produced 17,000
Units sold 4,000
Units in ending inventory 13,000
Variable costs per unit:
Direct materials Picture 91
Direct labor Picture 316
Variable manufacturing overhead Picture 33
Variable selling and administrative Picture 16
Fixed costs:
Fixed manufacturing overhead Picture 765,000
Fixed selling and administrative Picture 459,000

The absorption costing income statement prepared by the company’s accountant for last year appears below:


Sales Picture 3,720,000
Cost of goods sold 1,940,000

Gross margin 1,780,000
Selling and administrative expense 523,000

Net operating income Picture 1,257,000


2.
value:
10.00 points

Required:
1.

Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period. (Omit the "Picture" sign in your response.)

Total fixed manufacturing overhead in ending inventory Picture
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3.
value:
10.00 points

2.

Prepare an income statement for the year using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "Picture" sign in your response.)

Variable Costing Income Statement
Picture
Variable expenses:
Picture



Fixed expenses:



Picture