Denton Company manufactures and sells a single product. Cost data for the product are given below: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative 10 Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative $72,000 169,000 $241,000 Total fixed cost per month The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, are as follows Units Sold 14,000 22,000 Units Produced 18,000 18,000 August The company's Accounting Department has prepared absorption costing income statements for July and August as presented below: July 280,000 183,000 August Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $714,000 $1,122,000 440,000 $434,000 682,000 191,000 $251,000 $ 491,000