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 $ 4 11 3 2 $ 20 $ 45,000 172,000 $ 217,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July August 15,000 15,000 11,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $ 594,000 $ 1,026,000 231,000 399,000 363,000 627,000 194,000 210,000 $ 169,000 $ 417,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.