Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 5 Direct labor 11 Variable manufacturing 3 overhead Variable selling and 2 administrative Total variable cost per $ 21 unit Fixed costs per month: Fixed manufacturing $ 72,000 overhead Fixed selling and 163,000 administrative Total fixed cost per month $235,000 The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Units Produced Sold July 18,000 14,000 August 18,000 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 $672,000 $1,056,000 322,000 506,000 350,000 550,000 191,000 207,000 $159,000 343,000 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. Complete this question by entering your answers in the tabs below. Required Required Required 2 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss)