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				4
Variable selling and administrative				2
Total variable cost per unit			$	22
Fixed costs per month:
Fixed manufacturing overhead	$	105,000
Fixed selling and administrative		163,000
Total fixed cost per month	$	268,000

The product sells for $49 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	$	833,000		$	1,225,000
Cost of goods sold		425,000			625,000
Gross margin		408,000			600,000
Selling and administrative expenses		197,000			213,000
Net operating income	$	211,000		$	387,000

Required:

1. Determine the unit product cost under:

a. Absorption costing.

b. Variable costing.

2. Prepare contribution format variable costing income statements for July and August.

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