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

Variable costs per unit:
Direct materials			$	5
Direct labor				10
Variable manufacturing overhead				4
Variable selling and administrative				3
Total variable cost per unit			$	22
Fixed costs per month:
Fixed manufacturing overhead	$	72,000
Fixed selling and administrative		163,000
Total fixed cost per month	$	235,000

The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow:

Units Produced	Units Sold
July	24,000	20,000
August	24,000	28,000

The companys Accounting Department has prepared the following absorption costing income statements for July and August:

	July			August
Sales	$	940,000		$	1,316,000
Cost of goods sold		440,000			616,000
Gross margin		500,000			700,000
Selling and administrative expenses		223,000			247,000
Net operating income	$	277,000		$	453,000

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.