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

Variable costs per unit:
Direct materials			$	5
Direct labor				12
Variable manufacturing overhead				3
Variable selling and administrative				2
Total variable cost per unit			$	22
Fixed costs per month:
Fixed manufacturing overhead	$	162,000
Fixed selling and administrative		172,000
Total fixed cost per month	$	334,000

The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow:

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

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

	July			August
Sales	$	1,081,000		$	1,457,000
Cost of goods sold		598,000			806,000
Gross margin		483,000			651,000
Selling and administrative expenses		218,000			234,000
Net operating income	$	265,000		$	417,000

Required:

1. Determine the unit product cost under:

a. Absorption costing.

b. Variable costing.

2. Prepare contribution format variable costing income statements for July and August.

3. Reconcile the variable costing and absorption costing net operating incomes.