Denton Company manufactures and sells a single product. Cost data for the product are given: 5 10 3 3 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 $ 21 $ 75,000 166,000 $ 241,000 The product sells for $55 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 15,000 15,000 Units Sold 11,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 605,000 253,000 352,000 199,000 $ 153,000 August $ 1,045,000 437,000 608,000 223,000 385,000 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