Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $920. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	275
Units sold	260
Units in ending inventory	15
Variable costs per unit:
Direct materials	$110
Direct labor	$ 320
Variable manufacturing overhead	$ 40
Variable selling and administrative	$ 15
Fixed costs:
Fixed manufacturing overhead	$ 77,000
Fixed selling and administrative	$ 33,000

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

Sales	$ 239,200
Cost of goods sold	195,000
Gross margin	44,200
Selling and administrative expense	36,900
Net operating income	$ 7,300

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.