Exercise 7-2 Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO7-2) 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 gamelans are sold for $990. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units Variable costs per unit: 200 180 20 in ending inventory Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 120 $340 40 30 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 Cost of goods sold Gross margin Selling and administrative expense 178,200 140,400 37,800 29.400 $ 8,400 Net operating income 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. What is the amount of the difference in net operating income between the two costing methods? Complete this question by entering your answers in the tabs b Req 1 Req 2A Req 2B r 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 Req1 Req 2A > 2. Prepare an income statement for last year using variable costing. What is the amount of the difference in net operating income between the two costing methods? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare an income statement for last year using variable costing Ida Sidha Karya Company Variable Costing Income Statement KReq 1 Req 2B > Req 1 What is the amount of the difference in net operating income between the two costing methods? Amount of the difference in net operating income Req 2A Req 2B