Ida Sidha Karya Company is a family-owned company located 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 $860. Selected data for the companys operations last year follow:

Units in beginning inventory		0
Units produced		320
Units sold		285
Units in ending inventory		35
Variable costs per unit:
Direct materials	$	135
Direct labor	$	355
Variable manufacturing overhead	$	30
Variable selling and administrative	$	15
Fixed costs:
Fixed manufacturing overhead	$	64,000
Fixed selling and administrative	$	27,000

The absorption costing income statement prepared by the companys accountant for last year appears below:

Sales	$	245,100
Cost of goods sold		205,200
Gross margin		39,900
Selling and administrative expense		31,275
Net operating income	$	8,625

Prepare an income statement for last year using variable costing.

Ida Sidha Karya Company
Variable Costing Income Statement
Sales		$245,100
Variable expenses:
Variable cost of goods sold
Variable selling and administrative expense
		0
Contribution margin		245,100
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expense
		0
Net operating income		$245,100