Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	260
Units sold	230
Units in ending inventory	30
Variable costs per unit:
Direct materials	$ 105
Direct labor	$ 325
Variable manufacturing overhead	$ 45
Variable selling and administrative	$ 15
Fixed costs:
Fixed manufacturing overhead	$ 65,000
Fixed selling and administrative	$ 21,000

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

Sales	$ 200,100
Cost of goods sold	166,750
Gross margin	33,350
Selling and administrative expense	24,450
Net operating income	$ 8,900

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.