Exercise 7-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating Income (L07-2) Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910, Selected data for the company's operations last year follow: Units in beginning inventory 0 Units produced 300 Units sold 265 Units in ending inventory 35 Variable costs per unit: Direct materials $115 Direct labor $325 Variable manufacturing overhead $ 45 Variable selling and administrative $20 Fixed costs: Pixed manufacturing overhead $ 72,000 Fixed selling and administrative $ 34,000 The absorption costing income statement prepared by the company's accountant for last year appears below: ces Sales Cost of goods sold Gross margin Selling and administrative expande Net operating income $ 241,150 192, 125 49,025 39,300 $ 9,725 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 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? Food manufacturing overhead cost included in inventory Raamid 2 Required 1 Required 2 Prepare an income statement for last year using variable costing. Ida Company Variable Costing Income Statement