Ida Sidha Karya Company is a family-owned company located 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 for $970. Selected data for the company's operations last year follow. Units in beginning inventory Units produced Units sold 200 180 Units in ending inventory 20 Variable costs per uniti Direct materials $ 130 Direct labor $ 300 Variable manufacturing overhead $ 30 Variable selling and administrative $ 15 Fixed costar Fixed manufacturing overhead Fixed selling and administrative $ 63,000 $25,000 The absorption costing income statement prepared by the company's accountant for last year appears below. Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income Required: $174,600 139,500 35,100 27,700 $ 7,400 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. What is the amount of the difference in net operating income between the two costing methods?