Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $970. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	200
Units sold	180
Units in ending inventory	20
Variable costs per unit:
Direct materials	$ 130
Direct labor	$ 300
Variable manufacturing overhead	$ 30
Variable selling and administrative	$ 15
Fixed costs:
Fixed manufacturing overhead	$ 63,000
Fixed selling and administrative	$ 25,000

The absorption costing income statement prepared by the companys accountant for last year appears below:

Sales	$ 174,600
Cost of goods sold	139,500
Gross margin	35,100
Selling and administrative expense	27,700
Net operating income	$ 7,400

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.