erm Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO6-2] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold fc $990. Selected data for the company's operations last year follow: Units in beginning inventory Units produced 200 Units sold 180 Units in ending inventory Variable costs per unit: 20 $ 120 $ 340 $ 40 $ 30 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 56,000 $24,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales $ 178,200 140, 400 Cost of goods sold Gross margin Selling and administrative expense 37,800 29,400 Net operating income $ 8,400 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.

Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating Income (LO6-2] 20 Ida Company produces a handcrafted musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. Selected data for the company's operations last year follow: Units in beginning inventory Units produced 200 Units sold 180 Units in ending inventory Variable costs per unit Direct naterials $ 120 Direct labor 5340 Variable manufacturing overhead 5.40 Variable selling and administrative 530 Fixed costs Fixed manufacturing overhead $ 56,000 Fixed selling and administrative 5.24,000 The absorption costing Income statement prepared by the company's accountant for last year appears below: Sales $ 178,200 Cost of boods sold 140,400 Gross margin 37,800 Selling and administrative expenses 29,400 Net operating income $3,400 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Under absorption costing, how much fixed manufacturing overhead cost is included in the company's Inventory at the end of last year? Fixed manufacturing overhead cost included in inventory Retur 1 Required 2 > Required 1 Required 2 Prepare an income statement for last year using variable costing. Ida Company Variable Costing Income Statement