2. Assume that the company uses variable costing. Compute the unit produ EXERCISE 7-2 Variable Costing Income Statement; Explanation of Difference in Net Operating Income [SS LO7-2 Refer to the data in Exercise 7-1 for Ida Company. The absorption costing income statement prepared by the company's accountant for last year appears as shown: Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. Explain the difference in net operating income between the two costing methods. EXERCISE 7-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (S) LO7-3