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 $950. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		250
Units sold		235
Units in ending inventory		15
Variable costs per unit:
Direct materials	$	135
Direct labour	$	345
Variable manufacturing overhead	$	30
Variable selling and administrative	$	20
Fixed costs:
Fixed manufacturing overhead	$	65,000
Fixed selling and administrative	$	25,000

An absorption costing income statement prepared by the companys accountant appears below:

Sales	$	223,250
Cost of goods sold		180,950
Gross margin		42,300
Selling and administrative expense		29,700
Net operating income	$	12,600

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

IDA SIDHA KARYA COMPANY Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expense Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative Net operating income 0 0 0 0 $ 0 0