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 $870. Selected data for the company's operations last year follow: Units in beginning inventory 0 Units produced 260 Units sold 230 Units in ending inventory 30 Variable costs per unit: Direct materials 105 Direct labour 325 Variable manufacturing overhead $ 45 Variable selling and administrative $ 15 Fixed costs: Fixed manufacturing overhead $65,000 Fixed selling and administrative $21,000 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 $200, 100 166, 750 33, 350 24,450 $ 8,900 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 the variable costing method. IDA SIDHA KARYA COMPANY Variable Costing Income Statement Variable expenses: Fixed expenses