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

Variable costs per unit:
Direct materials	$ 5
Direct labor	11
Variable manufacturing overhead	3
Variable selling and administrative	2
Total variable cost per unit	$ 21
Fixed costs per month:
Fixed manufacturing overhead	$ 108,000
Fixed selling and administrative	175,000
Total fixed cost per month	$ 283,000

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	529,000	713,000
Gross margin	552,000	744,000
Selling and administrative expenses	221,000	237,000
Net operating income	$ 331,000	$ 507,000

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.

Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Prepare variable costing income statements for July and August. Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.)