Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold fo $980. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 280 265 15 $150 $ 370 $ 45 $ 30 $ 70,000 $ 30,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales $ 259,700 Cost of goods sold Gross margin Selling and administrative expense Net operating income Required: 215,975 43,725 37,950 $ 5,775 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.