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

Variable costs per unit:
Direct materials			$	3
Direct labor				11
Variable manufacturing overhead				2
Variable selling and administrative				2
Total variable cost per unit			$	18
Fixed costs per month:
Fixed manufacturing overhead	$	96,000
Fixed selling and administrative		160,000
Total fixed cost per month	$	256,000

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	24,000	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	$	1,000,000		$	1,400,000
Cost of goods sold		400,000			560,000
Gross margin		600,000			840,000
Selling and administrative expenses		200,000			216,000
Net operating income	$	400,000		$	624,000

Required:

1. Determine the unit product cost under:

a. Absorption costing. 20

b. Variable costing. 16

3. Reconcile the variable costing and absorption costing net operating incomes.