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 5 9 3 1 $ 18 $ 105,000 172,000 $ 277,000 The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow July August Units Produced 21,000 21,800 Units Sold 17,800 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August July August Sales $ 816,000 $ 1,200,000 Cost of goods sold 374,000 550,000 Gross margin 442,000 650,000 Selling and administrative expenses 189,000 197,000 Net operating income $ 253,000 453,000 $ 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