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 $7 10 5 3 $25 $315,000 245,000 $ 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 August $ 1,200,000 600,000 800,000 Gross margin 300,000 400,000 Selling and administrative expenses 290,000 365,000 Net operating income $ 10,000 $ 95,000 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.