Exercise 6-2 Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO6-2) Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Ball in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelons are sold for $980. Selected data for the company's operations last year follow 280 265 15 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ $ $ $ 150 370 45 30 $70,000 $30,000 The absorption costing income statement prepared by the company's accountant for last year appears below: The absorption costing income statement prepared by the company's accountant for last year appears below. Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $259,700 215,975 43,725 37,950 $ 5,775 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. Required 1 Required 2 Prepare an income statement for last year using variable costing. $ 259,700 Ida Sidha Karya Company Variable Costing Income Statement Sales | Variable expenses: Variable cost of goods sold $ 149,725 Variable selling and administrative expense 7,950 157,675 102,025 Fixed manufacturing overhead Fixed selling and administrative expense 70,000 30,000 100,000 2,025 Net operating income $