Denton Company manufactures and sells a single product. Cost data for the product are given: 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 10 5 3 $ 25 $ 315,000 245,000 $ 560,000 The product sells for $60 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 17,500 17,500 Units Sold 15,000 20,000 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 $ 900,000 600,000 300,000 290,000 $ 10,000 August $ 1,200,000 800,000 400,000 305,000 $ 95,000 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 Net operating income (loss) Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductio value.) July Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss)