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 10 3 2 $ 20 $ 60,000 166,000 $ 226,000 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 15,000 15,000 Units Sold 11,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: August July $ 506,000 $ 874,000 418,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income 242,000 264,000 188,000 $ 76,000 456,000 204,000 $ 252,000