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 4 2 $21 $ 54,000 166,000 $220,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July August 18,000 18,000 14,000 22,000 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 Net operating incone July August $ 756,000 $ 1,188,000 308,000 484,000 448,000 704,000 194,000 210,000 $ 254,000 S 494,000 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