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

Variable costs per unit:
Direct materials	$ 6
Direct labor	10
Variable manufacturing overhead	3
Variable selling and administrative	2
Total variable cost per unit	$ 21
Fixed costs per month:
Fixed manufacturing overhead	$ 90,000
Fixed selling and administrative	166,000
Total fixed cost per month	$ 256,000

The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, follow:

	Units Produced	Units Sold
July	18,000	14,000
August	18,000	22,000

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

	July	August
Sales	$ 714,000	$ 1,122,000
Cost of goods sold	336,000	528,000
Gross margin	378,000	594,000
Selling and administrative expenses	194,000	210,000
Net operating income	$ 184,000	$ 384,000

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.