$ 5 Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor 10 Variable manufacturing overhead Variable selling and administrative Total variable cost per unit $ 20 Fixed costs per month: Fixed manufacturing overhead $ 60,000 Fixed selling and administrative 169,000 Total fixed cost per month $ 229,000 3 2 The product sells for $54 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 19,800 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 August $ 594,000 $ 1,026,000 242,000 418,000 352,000 608,000 191,000 207,000 $ 161,000 $ 401,000 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