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 $ 4 10 3 1 $ 18 $ 45,000 169,000 $ 214,000 The product sells for $48 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 Cost of goods sold Gross margin Selling and administrative expenses Net operating income July August $ 528,000 $ 912,000 220,000 380,000 308,000 532,000 180,000 188,000 $ 128,000 $ 344,000 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.