Refer to the data in Exercise 8-1 for Ida Sidha Karya Company. An absorption costing income statement prepared by the company's accountant appears below:

Required:
1. Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.
2. Prepare an income statement for the year using the variable costing method. Explain the difference in operating income between the two costing methods.

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Sales .... Cost of goods sold. Gross margin.. Selling and administrative expenses.. Operating income.. **** $382,500 315.000 67,500 51,250 $ 16,250