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	3
Total variable cost per unit	$ 19
Fixed costs per month:
Fixed manufacturing overhead	$ 96,000
Fixed selling and administrative	169,000
Total fixed cost per month	$ 265,000

The product sells for $47 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	$ 940,000	$ 1,316,000
Cost of goods sold	400,000	560,000
Gross margin	540,000	756,000
Selling and administrative expenses	229,000	253,000
Net operating income	$ 311,000	$ 503,000

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.

Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a. Absorption costing b. Variable costing Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August 0 0 0 0 0 0 Net operating income (loss) $ 0 $ 0