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

Variable costs per unit:

Direct materials $ $4$

Direct labor $11$

Variable manufacturing overhead $3$

Variable selling and administrative $3$

Total variable cost per unit $ $21$

Fixed costs per month:

Fixed manufacturing overhead $ $90,000$

Fixed selling and administrative $172,000$

Total fixed cost per month $ $262,000$

The product sells for $$45$ 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 has prepared the following absorption costing income statements for July and August:

July August

Sales $ $495,000$ $ $855,000$

Cost of goods sold $264,000456,000$

Gross margin $231,000399,000$

Selling and administrative expenses $205,000229,000$

Net operating income $ $26,000$ $ $170,000$

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.