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 $860. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory 320 285 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 Fixed selling and administrative $ 64,000 $27,000 The absorption costing income statement prepared by the company's 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 $ 8,625 Net operating income. Required: 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?