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 for $850. Selected data for the company's operations last year follow: 250 225 25 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead $ $ 100 320 40 20 $60,000 Fixed selling and administrative $20,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales $ 191,250 157,500 Cost of goods sold Gross margin Selling and administrative expense 33,750 24,500 Net operating income $ 9,250 expense Net operating income $ 9,250 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. Ida Sidha Karya Company Variable Costing Income Statement Variable expenses: Variable cost of goods sold Variable selling and administrative expense Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense