Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $980. Selected data for the companys operations last year follow:

Units in beginning inventory	0
Units produced	240
Units sold	225
Units in ending inventory	15
Variable costs per unit:
Direct materials	$140
Direct labor	$ 360
Variable manufacturing overhead	$ 35
Variable selling and administrative	$ 20
Fixed costs:
Fixed manufacturing overhead	$ 66,000
Fixed selling and administrative	$ 28,000

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

Sales	$ 220,500
Cost of goods sold	182,250
Gross margin	38,250
Selling and administrative expense	32,500
Net operating income	$ 5,750

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