praying_for_75 on "Absorption Costing"

Beginning inventory- 30,000 units Production- 120,000 units
Available- 150,000 units Sales- 110,000 units Ending inventory-
40,000 units The following is on a per unit basis: Selling price-
$5.00 Var.Manufacturing costs- 1.00 Var. selling costs- 2.00 Fixed
Manuf. costs ( based on 100,000 units)- 0.25 Fixed selling costs
(based on 100,000 units)- 0.65 Total Fixed costs remain unchanged
within the relevant range of 25,000 units to total capacity of
160,000. Question- If variances are charged to COGS, what is the NI
under absorption costing? Answer- $132,500 Explanation: Step 1-
Increase in inventory- 10,000 units * $0.25 fixed manufacturing
costs per unit=$2500 fixed cost trannsferred to the next period.
Step 2- NI under absorption costing is 130,000+ 2,500= 132,500 What
I don't understand is step 2...What is 130,000 and why is it added
to 2,500? Please help! Thanks