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Problem Overview:

• Selling price per unit: Rp 14.40
• Production during 2013: 80,000 units
• Units sold during 2013: 72,000 units
• Variable and fixed costs:
  • Variable Costs:
    • Raw materials: Rp 280,000
    • Direct labor: Rp 200,000
    • Factory overhead: Rp 80,000
    • Administrative and selling expenses: Rp 69,120
  • Fixed Costs:
    • Factory overhead: Rp 180,000
    • Administrative and selling expenses: Rp 120,000

Questions:

1. How much is the cost of goods sold (COGS) per unit using the variable costing method?
2. What is the net profit for 2013 using the variable costing method?

Solution:

Step 1: Calculate Total Variable Cost per Unit

The variable costs given are:

• Raw materials: Rp 280,000
• Direct labor: Rp 200,000
• Factory overhead: Rp 80,000

Thus, the total variable production cost is: $\text{Total Variable Production Cost} = 280,000 + 200,000 + 80,000 = Rp 560,000$

For variable administrative and selling expenses: $69,120 \, \text{(given)}$

So, the total variable cost becomes: $\text{Total Variable Cost} = 560,000 + 69,120 = Rp 629,120$

Since 80,000 units were produced, the variable cost per unit is: $\text{Variable Cost per Unit} = \frac{629,120}{80,000} = Rp 7.86$

Step 2: Calculate Contribution Margin per Unit

The selling price per unit is Rp 14.40, and the variable cost per unit is Rp 7.86.

$\text{Contribution Margin per Unit} = 14.40 - 7.86 = Rp 6.54$

Step 3: Calculate Net Profit Using Variable Costing

Out of the 80,000 units produced, only 72,000 units were sold. So:

$\text{Total Contribution Margin} = 72,000 \times 6.54 = Rp 470,880$

Now, subtract the fixed costs:

• Factory overhead: Rp 180,000
• Administrative and selling expenses: Rp 120,000

$\text{Total Fixed Costs} = 180,000 + 120,000 = Rp 300,000$

$\text{Net Profit} = 470,880 - 300,000 = Rp 170,880$

Answers:

1. Variable Cost per Unit: Rp 7.86
2. Net Profit for 2013 (using variable costing): Rp 170,880

Do you have any questions or need further clarification?

Here are 5 related questions to deepen your understanding:

1. How would the net profit change if the selling price increased to Rp 15.00 per unit?
2. What would be the break-even sales volume using the variable costing method?
3. How do fixed costs affect profit when sales volume increases?
4. How is absorption costing different from variable costing?
5. What is the impact on profit if 10,000 units remain in inventory at the end of the year?

Tip: Remember that in variable costing, fixed overhead is not included in the cost of goods sold, but treated as a period cost.