Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $850. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		250
Units sold		225
Units in ending inventory		25
Variable costs per unit:
Direct materials	$	100
Direct labor	$	320
Variable manufacturing overhead	$	40
Variable selling and administrative	$	20
Fixed costs:
Fixed manufacturing overhead	$	60,000
Fixed selling and administrative	$	20,000

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

Sales	$	191,250
Cost of goods sold		157,500
Gross margin		33,750
Selling and administrative expense		24,500
Net operating income	$	9,250

Required:

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