Exercise 7-2 Variable Costing Income Statement, Explanation of Difference in Net Operating Income LO7-2 Ida Sidha Karya Company is a family-owned company located on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $840. Selected data for the company's operations last year follow Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unitt 300 275 25 Direct materials Direct 1abor Variable manufacturing overhead Variable selling and administrative $ 100 $ 310 30 35 Fixed costss , Fixed manufacturing overhead Pixed sel1ing and administrative 66,000 31,000 sThe absorption costing income statement prepared by the company's accountant for last year appears below 231,000 181.500 Sales Cost of goods sold Gross margin Selling and administrative expense 40 625 Net operating income 49,500 $ 8,875 Required: year? 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last 2. Prepare an income statement for last year using variable costing What is the amount of the difference in net operating income between the two costing methods