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 $ 6 9 4 2 $ 21 $ 126,000 166,000 $ 292,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 21,000 21,000 Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses July August $ 799,000 $ 1,175,000 425,000 374,000 200,000 625,000 550,000 216,000 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a. Absorption costing $ 23 b. Variable costing $ 20 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August $ 935,000 $ 875,000 Sales Variable expenses: Variable cost of goods sold 340,000 500,000 Variable selling and administrative expenses 17,000 25,000 Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses 357,000 525,000 578,000 350,000 63,000 63,000 169,000 169,000 Total fixed expenses 232,000 232,000 Net operating income (loss) $ 346,000 $ 118,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing net operating income (loss) $ 125,000 $ August 293,000 Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing 12,000 (12,000) x Absorption costing net operating income (loss) $ 137,000 $ 28,100