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EXERCISE 7-2 Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO2] Refer to the data in Exercise 71 for Ida Sidha Karya Company. The absorption costing income statement prepared by the company's accountant for last year appears below (all currency values are in thousands of rupiahs): Rp191,250 157,500 Sales Cost of goods sold Gross margin.. Selling and administrative expense Net operating income... 33,750 24,500 Rp 9,250 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 variable costing. Explain the difference in net operating income between the two costing methods. EXERCISE 7-1 Variable and Absorption Costing Unit Product Costs [LO1] Ida Sidha Karya Company is a family-owned company located in the village of Gianyar 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 sounding bars are cast from brass and hand-filed to attain just the right sound. The bars are then mounted on an intricately hand-carved wooden base. The gamelans are sold for 850 (thousand) rupiahs. (The currency in Indonesia is the rupiah, which is denoted by Rp.) Selected data for the company's operations last year follow (all currency values are in thousands of rupiahs): 0 250 Units in beginning inventory. Units produced. Units sold .. Units in ending inventory 225 25 Variable costs per unit: Direct materials Direct labor.. Variable manufacturing overhead. Variable selling and administrative Rp100 Rp320 Rp40 Rp20 Fixed costs: Fixed manufacturing overhead. Fixed selling and administrative. Rp60,000 Rp20,000