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 $880. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		280
Units sold		240
Units in ending inventory		40
Variable costs per unit:
Direct materials	$	115
Direct labor	$	335
Variable manufacturing overhead	$	35
Variable selling and administrative	$	25
Fixed costs:
Fixed manufacturing overhead	$	63,000
Fixed selling and administrative	$	23,000

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

Sales	$	211,200
Cost of goods sold		170,400
Gross margin		40,800
Selling and administrative expense		29,000
Net operating income	$	11,800

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