Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor $6 11 2 Variable manufacturing overhead Variable selling and administrative Total variable cost per unit 2 $ 21 Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative $ 54,000 169,000 $ 223,000 Total fixed cost per month The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Units Sold July August Produced 18,000 14,000 18,000 22,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August Sales $ 658,000 $1,034,000 Cost of goods sold 484,000 308,000 350,000 Gross margin 550,000 Selling and administrative expenses 197,000 213,000 Net operating income $ 153,000 $ 337,000 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