5-2-2 (1)

Denton Company manufactures and sells a single product. Cost data for the product are given below Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable sel ing and administrative 10 Total variable cost per unit Fixed costs per month: 20 Fixed manufacturing overhead Fixed selling and administrative 54,000 166,000 Total fixed cost per month 220,000 The product sells for $53 per unit. Production and sales data for July and August, the first two months of operations, are as follows: Units Units Sold 14,000 22,000 July August 18,000 18,000 The company's Accounting Department has prepared absorption costing income statements for July and August as presented below Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income August $742,000 $1,166,000 84,000 434,000 682.000 188,000 254,000 494,000 July 308,000 180,000 Required: 1. Determine the unit product cost under absorption costing and variable costing. Unit Product Cost a. Absorption costing b.Vaiable costing