A company has a variable manufacturing cost of $3.00 per unit, a variable selling cost of $1.00 per unit; a fixed manufacturing cost of $100,000 per year; and a fixed selling and administrative cost of $60,000 per year. The selling price is $9.00 per unit. During the year, 50,000 units are produced and 42,000 units are sold.

1. What is the cost per unit of inventory using full costing?

2. What is the cost per unit of inventory using variable costing?

3. Prepare an income statement using full costing.

4. Prepare an income statement using variable costing.