18 Bharat Bicycle, located in India, produces an inexpensive yet rugged bicycle for use on crowded city streets. The company sells the bicycle for 575 rupees. (Indian currency is denominated in rupees, denoted by R.) Selected data for the company's operations last year follow: o 15,200 14,000 1,200 R R 190 214 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative R 44 R 13 R 547,200 R364,800 An absorption costing income statement prepared by the company's accountant appears below: R8,050,000 R 0 Sales (14,000 units * R575 per unit) Cost of goods sold: Beginning inventory Add cost of goods manufactured (15,200 units * R ? per unit) 7,356,800 7,356,800 Goods available for sale Less ending inventory (1,200 units R ? per unit) 580,800 6,776,000 1,274,000 Gross margin Selling and administrative expenses: Variable selling and administrative Fixed selling and administrative 182,000 364,800 546,800 Operating income R 727,200 Required: 1. Determine how much of the ending inventory of R580,800 above consists of fixed manufacturing overhead cost deferred in inventory to the next period. Total fixed manufacturing overhead in ending inventory R 2. Prepare an income statement for the year using the variable costing method. Variable Costing Income Statement R Variable expenses: Variable cost of goods sold: R 0 0 0 0 Fixed expenses: 0 R 0