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 12 4 3 $ 24 $ 72,000 160,000 $ 232,000 The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Sold July August Units Produced 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 income July August $ 714,000 350,000 $ 1,122,000 550,000 364,000 572,000 202,000 226,000 $ 162,000 $ 346,000 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.