Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $990. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	250
Units sold	230
Units in ending inventory	20
Variable costs per unit:
Direct materials	$ 145
Direct labor	$ 365
Variable manufacturing overhead	$ 40
Variable selling and administrative	$ 25
Fixed costs:
Fixed manufacturing overhead	$ 65,000
Fixed selling and administrative	$ 29,000

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

Sales	$ 227,700
Cost of goods sold	186,300
Gross margin	41,400
Selling and administrative expense	34,750
Net operating income	$ 6,650

2. Prepare an income statement for last year using variable costing.