Denton Company manufactures and sells a single product. Cost data for the product are given:

Variable costs per unit:
Direct materials	$ 5
Direct labor	10
Variable manufacturing overhead	4
Variable selling and administrative	1
Total variable cost per unit	$ 20
Fixed costs per month:
Fixed manufacturing overhead	$ 120,000
Fixed selling and administrative	166,000
Total fixed cost per month	$ 286,000

The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow:

	Units Produced	Units Sold
July	30,000	26,000
August	30,000	34,000

The companys Accounting Department has prepared the following absorption costing income statements for July and August:

	July	August
Sales	$ 1,404,000	$ 1,836,000
Cost of goods sold	598,000	782,000
Gross margin	806,000	1,054,000
Selling and administrative expenses	192,000	200,000
Net operating income	$ 614,000	$ 854,000

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.