Denton Company manufactures and sells a single product. Cost data for the product are given: 2 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $ 3 10 2 1 $ 16 $ 150,000 163,000 $ 313,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced 30,000 30,000 Units Sold 26,000 34,000 July August The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July $1,222,000 520,000 702,000 189,000 $ 513,000 August $ 1,598,000 680,000 918,000 197,000 $ 721,000 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