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

Variable costs per unit:
Direct materials	$ 4
Direct labor	9
Variable manufacturing overhead	3
Variable selling and administrative	2
Total variable cost per unit	$ 18
Fixed costs per month:
Fixed manufacturing overhead	$ 120,000
Fixed selling and administrative	169,000
Total fixed cost per month	$ 289,000

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	420,000	588,000
Gross margin	580,000	812,000
Selling and administrative expenses	209,000	225,000
Net operating income	$ 371,000	$ 587,000

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.