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Bharat Bicycle, located in India, produces an inexpensive yet rugged bicycle for use on crowded city streets. The company sells the bicycle for 555 rupees. (Indian currency is denominated in rupees, denoted by R.) Selected data for the company's operations last year follow: 0 14,200 13,400 800 R 188 R 223 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative R 40 R 11 R553,800 R369,200 An absorption costing income statement prepared by the company's accountant appears below: R 7,437,000 R Sales (13,400 units * R555 per unit) Cost of goods sold: Beginning inventory Add cost of goods manufactured (14,200 units * R ? per unit) 0 6,958,000 6,958,000 Goods available for sale Less ending inventory (800 units * R ? per unit) 392,000 6,566,000 871,000 Gross margin Selling and administrative expenses: Variable selling and administrative Fixed selling and administrative 147,400 369,200 516,600 Operating income R 354,400 Required: 1. Determine how much of the ending inventory of R392.000 above consists of fixed manufacturing overhead cost deferred in inventory to the next period. Total fixed manufacturing overhead in ending inventory RO 2. Prepare an income statement for the year using the variable costing method. Variable Costing Income Statement 20 Variable expenses: Variable cost of goods sold: 20 Fixed expenses: R R