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 overhead $3$

Variable selling and administrative $2$

Total variable cost per unit $ $21$

Fixed costs per month:

Fixed manufacturing overhead $ $75,000$

Fixed selling and administrative $172,000$

Total fixed cost per month $ $247,000$

The product sells for $$54$ per unit. Production and sales data for July and August, the first two months of operations, follow:

Units Produced Units Sold

July $15,00011,000$

August $15,00019,000$

The company$$s Accounting Department prepared the following absorption costing income statements for July and August:

July August

Sales $ $594,000$ $ $1,026,000$

Cost of goods sold $264,000456,000$

Gross margin $330,000570,000$

Selling and administrative expenses $194,000210,000$

Net operating income $ $136,000$ $ $360,000$

Required:

Determine the unit product cost under:

Absorption costing.

Variable costing.

Prepare variable costing income statements for July and August.

Reconcile the variable costing and absorption costing net operating incomes.Problem $6-22($Algo$)$ Variable Costing Income Statements; Income Reconciliation $[$LO$6-1,$ L$06-2,$ L$06-3]$

Denton Company manufactures and sells a single product. Cost data for the product are glven:

The product sells for $$54$ per unit. Production and sales data for July and August, the first two months of operations, follow:

The company's Accounting Department prepared the following absorption costing Income statements for July and August

Required:

Determine the unit product cost under:

a$.$ Absorption costing.

b$.$ Varlable costing.

$2$ Prepare varlable costing income statements for July and August.

Reconclle the varlable costing and absorption costing net operating Incomes.

Complete this question by entering your answers in the tabs below.

Prepare variable costing income statements for July and August.