Ida Sidha Karya Company is a family-owned company located in the village of Glanyar on the Island of Ball 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 $900. 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 300 275 25 $ 125 $ 345 $ 45 $ 35 $ 63,000 $ 25,000 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 $247,500 199,375 48,125 34,625 $ 13,500