Cost data for the single product-line company are as follows:

Variable costs per unit:
Direct materials			$	4
Direct labor				9
Variable manufacturing overhead				3
Variable selling and administrative				1
Total variable cost per unit			$	17
Fixed costs per month:
Fixed manufacturing overhead	$	135,000
Fixed selling and administrative		169,000
Total fixed cost per month	$	304,000

The product sells for $50 per unit. Production and sales data for the following two months are as follows:

	Units Produced	Units Sold
July	27,000	23,000
August	27,000	31,000

Absorption costing income statements were prepared by Deenton's Controller for the same two months as follows:

	July			August
Sales	$	1,150,000		$	1,550,000
Cost of goods sold		483,000			651,000
Gross margin		667,000			899,000
Selling and administrative expenses		192,000			200,000
Net operating income	$	475,000		$	699,000

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.