Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit $ 6 10 3 2 $ 21 Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $ 54,000 169,000 $ 223,000 The product sells for $46 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July August 18,000 18,000 14,000 22,000 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. $ 644,000 $ 1,012,000 308,000 484,000 336,000 528,000 197,000 213,000 $ 139,000 $ 315,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes