Bharat Bicycle, located in India, produces an inexpensive yet rugged bicycle for use on crowded city streets. The company sells the bicycle for 540 rupees. (Indian currency is denominated in rupees, denoted by R.) Selected data for the company's operations last year follow: 0 18,300 16,600 1,700 R R 143 173 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 45 R 34 R1,207,800 R 805,200 An absorption costing income statement prepared by the company's accountant appears below: An absorption costing income statement prepared by the company's accountant appears below: R8,964,000 R 0 Sales (16,600 units * R540 per unit) Cost of goods sold: Beginning inventory Add cost of goods manufactured (18,300 units * R ? per unit) 7,814,100 Goods available for sale 7,814,100 Less ending inventory (1,700 units * R ? per unit) 725,900 7,088,200 1,875,800 Gross margin Selling and administrative expenses: Variable selling and administrative Fixed selling and administrative 564,400 805,200 1,369,600 Operating income R 506,200 Required: 1. Determine how much of the ending inventory of R725,900 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. RO Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Variable selling and administrative R 0 0 0 0 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 0 Operating income R 0