A few years ago, Jean and Jeannette set up a small business manufacturing bicycle storage bars. Having foreseen that the sale of bicycles would experience a remarkable boom in families in Quebec, they decided to develop a storage system for multiple bicycles on the wall. Here is the relevant company information for the first year: Units produced during the year: 12,000 Units sold during the year: 9,000 Manufacturing cost Raw materials: $ 60,000 Direct labor: $ 30,000 Variable manufacturing overheads: $ 36,000 Fixed manufacturing overheads: $ 48,000 Selling and administration costs Selling and administration fees (fixed): $ 50,000 Selling and administration costs (variable): $ 1.00 per unit Selling price per unit: $ 30 Inventory at the beginning of the year: 0

1. If the company uses the full cost method, calculate: a) the unit cost of manufacture b) prepare the income statement for the year 2. If the company uses the variable cost method, calculate a) the unit cost of manufacture b) prepare the income statement for the year 3. Reconcile the differences between the two methods (net profit) or how do you explain the difference obtained between the two methods in terms of net profit?