Ida Sidha Karya Company is a family-owned company located in the village of Glanyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		310
Units sold		280
Units in ending inventory		30
Variable costs per unit:
Direct materials	$	130
Direct labor	$	350
Variable manufacturing overhead	$	50
Variable selling and administrative	$	40
Fixed costs:
Fixed manufacturing overhead	$	62,000
Fixed selling and administrative	$	26,000

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

Sales	$	254,800
Cost of goods sold		204,400
Gross margin		50,400
Selling and administrative expense		37,200
Net operating income	$	13,200

Required:

1.	Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period.

Total fixed manufacturing overhead in ending inventory:

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