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

Variable costs per unit:
Direct materials			$	3
Direct labor				12
Variable manufacturing overhead				3
Variable selling and administrative				3
Total variable cost per unit			$	21
Fixed costs per month:
Fixed manufacturing overhead	$	75,000
Fixed selling and administrative		163,000
Total fixed cost per month	$	238,000

The product sells for $51 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 has prepared the following absorption costing income statements for July and August:

	July			August
Sales	$	561,000		$	969,000
Cost of goods sold		253,000			437,000
Gross margin		308,000			532,000
Selling and administrative expenses		196,000			220,000
Net operating income	$	112,000		$	312,000

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.