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 $7 10 $ $25 $315,000 Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 245,000 $560,000 The product sells for $60 per unit. Production and sales data for July and August, the first two months of operations, follow. Units Produced Units Sold 17,500 17,500 July August 15,000 20,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August Sales Cost of goods sold July $900,000 600,000 August $ 1,200,000 800,000 Gross margin 300,000 400,0 Selling and administrative expenses 290,000 305,000 Net operating income $10,000 $ 95,000 Required: