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 $ 4 10 3 2 $ 19 $ 144,000 166,000 $ 310,000 The product sells for $46 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 24,000 24,000 Units Sold 20,000 28,000 The company's Accounting Department prepared the following absorption costing income statements for July and August: 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. July August $ 920,000 $ 1,288,000 460,000 644,000 460,000 206,000 644,000 222,000 $ 254,000 $ 422,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.