Jade Company manufactures and sells premium tomato juice by the gallon. The company just finished its first year of operations. The following data relates to this first year:

	Number of gallons produced...........................................	75,000
	Number of gallons sold...................................................	70,000
	Sales price........................................................................	$3.00 per gallon
	Unit product cost under variable costing........................	$1.45 per gallon
	Total contribution margin................................................	$84,000
	Total fixed manufacturing overhead cost.......................	$63,000
	Total fixed selling and administrative expense...............	$10,500

Required:

1. Using the absorption costing method, prepare the company's income statement for the year.

2. Using variable costing method, prepare the companys income statement for the year.

3. For decision making purpose, which is the better method? Why?