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 3 2 $ 19 $ 90,000 172,000 $ 262,000 The product sells for $45 per unit. Production and sales data for July and August, the first two months of operations, follow Units Produced July August 18,000 18,000 Units Sold 14,000 22,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July Sales $630,000 August $ 990,000 Cost of goods sold 308,000 484,000 Gross margin 322,000 500,000 Selling and administrative expenses Net operating incone 200,000 $122,000 216,000 $ 290,000 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.