Exercise $6-2($Algo$)$ Variable Costing Income Statement; Explanation of Difference in Net Operating Income $[$LO$6-2]$

Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $$970.$ Selected data for the company$$s operations last year follow:

Units in beginning inventory $0$

Units produced $200$

Units sold $180$

Units in ending inventory $20$

Variable costs per unit:

Direct materials $ $130$

Direct labor $ $300$

Variable manufacturing overhead $ $30$

Variable selling and administrative $ $15$

Fixed costs:

Fixed manufacturing overhead $ $63,000$

Fixed selling and administrative $ $25,000$

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

Sales $ $174,600$

Cost of goods sold $139,500$

Gross margin $35,100$

Selling and administrative expense $27,700$

Net operating income $ $7,400$

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.