Denton Company manufactures and sells a single product. Cost data for the product are given below. 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 $ 108,000 166,000 $ 274 000 The product sells for $53 per unit. Production and sales data for July and August, the first two months of operations, are as follows: Units Produced 27,000 27.000 Units Sold 23,000 31,000 July August July The company's Accounting Department has prepared absorption costing income statements for July and August as presented below. August Sales $1,219,000 $1,643,000 Cost of goods sold 506,000 682,000 Gross margin $ 713,000 $961,000 Selling and administrative expenses 189.000 197.000 Net operating Income $ 524,000 $764.000 Required: 1. Determine the unit product cost under absorption costing and variable costing Unit Product Cost a. Absorption costing b. Variable costing 2. Prepare contribution format variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August Variable expenses Total variable expenses Fixed expenses Total foced expenses Net operating income (loss) 3. Reconcile the variable costing and absorption costing net operating income (loss) figures. August Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing net operating income (oss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) Inventory under absorption costing Absorption costing net operating income (loss)