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 $2$

Variable selling and administrative $2$

Total variable cost per unit $ $19$

Fixed costs per month:

Fixed manufacturing overhead $ $96,000$

Fixed selling and administrative $166,000$

Total fixed cost per month $ $262,000$

The product sells for $$50$ per unit. Production and sales data for July and August, the first two months of operations, follow:

Units Produced Units Sold

July $24,00020,000$

August $24,00028,000$

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

July August

Sales $ $1,000,000$ $ $1,400,000$

Cost of goods sold $420,000588,000$

Gross margin $580,000812,000$

Selling and administrative expenses $206,000222,000$

Net operating income $ $374,000$ $ $590,000$

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.