Ida Sidha Karya Company is a family-owned company located in the village of Gianyar 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 to a Canadian importer for $860. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 320 285 35 135 355 $ 30 $ 15 $ 64,000 $ 27,000 An absorption costing income statement prepared by the company's accountant appears below: Sales Cost of goods sold Gross margin Selling and administrative expenses Operating income $245,100 205,200 39,900 31,275 $ 8,625