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 3 11 4 1 $ 19 $ 45,000 175,000 $220,000 The product sells for $49 per unit. Production and sales data for July and August, the first two months of operations, follow Units Sold Units Produced July August 15,000 15,000 11,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August Sales July $539,000 August $ 931,000 Cost of goods sold 231,000 399,000 Gross margin 308,000 532,000 Selling and administrative expenses 186,000 194,000 $122,000 $ 338,000 Net operating income 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.