Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconcillation [LO6-1, LO6-2, LO6-3] 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 11 4 $ 21 $ 120,000 160,000 $ 280,000 The product sells for $55 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 24,000 24,000 Units Sold 20,000 28,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: 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. July $ 1,100,000 $ 1,540,000 480,000 672,000 620,000 200,000 $420,000 868,000 216,000 $ 652,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. a. Absorption costing b. Variable costing Unit Product Cost < Required 1 Required 2 >