04-4, LC Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Yixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 5 10 3 2 $ 20 $ 75,000 175,000 $ 250,000 5 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 15,000 15,000 Units Sold 11,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July $ 517,000 253,000 264,000 197,000 $ 67,000 August $ 893,000 437,000 456,000 213,000 $ 243,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August 3. Reconcile the variable costing and absorption costing net operating incomes