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

Variable costs per unit:

Direct materials $ $4$

Direct labor $9$

Variable manufacturing overhead $3$

Variable selling and administrative $2$

Total variable cost per unit $ $18$

Fixed costs per month:

Fixed manufacturing overhead $ $84,000$

Fixed selling and administrative $163,000$

Total fixed cost per month $ $247,000$

The product sells for $$52$ per unit. Production and sales data for July and August, the first two months of operations, follow:

Units Produced Units Sold

July $21,00017,000$

August $21,00025,000$

The company$$s Accounting Department has prepared the following absorption costing income statements for July and August:

July August

Sales $ $884,000$ $ $1,300,000$

Cost of goods sold $340,000500,000$

Gross margin $544,000800,000$

Selling and administrative expenses $197,000213,000$

Net operating income $ $347,000$ $ $587,000$

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.