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

Variable costs per unit:

Direct materials $ $6$

Direct labor $10$

Variable manufacturing overhead $4$

Variable selling and administrative $2$

Total variable cost per unit $ $22$

Fixed costs per month:

Fixed manufacturing overhead $ $60,000$

Fixed selling and administrative $163,000$

Total fixed cost per month $ $223,000$

The product sells for $$51$ per unit. Production and sales data for July and August, the first two months of operations, follow:

Units Produced Units Sold

July $15,00011,000$

August $15,00019,000$

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

July August

Sales $ $561,000$ $ $969,000$

Cost of goods sold $264,000456,000$

Gross margin $297,000513,000$

Selling and administrative expenses $185,000201,000$

Net operating income $ $112,000$ $ $312,000$

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.