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

Variable costs per unit:
Direct materials			$	3
Direct labor				9
Variable manufacturing overhead				3
Variable selling and administrative				2
Total variable cost per unit			$	17
Fixed costs per month:
Fixed manufacturing overhead	$	84,000
Fixed selling and administrative		172,000
Total fixed cost per month	$	256,000

The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow:

	Units Produced	Units Sold
July	21,000	17,000
August	21,000	25,000

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

	July		August
Sales	$	918,000		$	1,350,000
Cost of goods sold		323,000			475,000
Gross margin		595,000			875,000
Selling and administrative expenses		206,000			222,000
Net operating income	$	389,000		$	653,000

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.