For the current year ended $30$th June, Stamford Ltd had the following data:

Required

Units produced $15,000$ units

Unit sold $18,000$ units

Sale price per unit $$160$

Production costs:

Direct material per unit $$40$

Direct labour per unit $$30$

Variable manufacturing overhead per unit $$15$

Fixed manufacturing overhead per unit $$25$

Non$-$manufacturing costs:

Variable selling and administrative costs $$65,000$

Fixed selling and administrative costs $$110,000$

$1$ Calculate the unit product cost using both absorption and variable costing.

$2$ Prepare an income statement using absorption costing.

$3$ Prepare an income statement using variable costing.

$4$ Which method, absorption costing or variable costing, shows a higher profit? Why?