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 $ 45,000 Fixed selling and administrative 166,000 Total fixed cost per month $ 211,000 The product sells for $52 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July 15,000 11,000 August 15,000 19,000 The companys Accounting Department prepared the following absorption costing income statements for July and August: July August Sales $ 572,000 $ 988,000 Cost of goods sold 198,000 342,000 Gross margin 374,000 646,000 Selling and administrative expenses 188,000 204,000 Net operating income $ 186,000 $ 442,000 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.