Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials. Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month July August Units Produced The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: 27,000 27,000 $ 4 11 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 3 2 $ 20 $ 108,000 160,000 $ 268,000 Units Sold 23,000 31,000 The company's Accounting Department prepared the following absorption costing income statements for July and August: July August $ 1,242,000 $ 1,674,000 682,000 992,000 222,000 $ 770,000 506,000 736,000 206,000 $530,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.

Denton Company manufactures and sells a single product. Cost data for the product are given: The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: The company's Accounting Department prepared the following absorption costing income statements for July and August: 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