Problem 6-22 (Static) Variable Costing Income Statements; Income Reconciliation (LO6-1, LO6-2, L06-3) Denton Company manufactures and sells a single product. Cost data for the product are given Variable costs per unit: Direct materials $7 Direct labor 10 Variable manufacturing overhead 5 Variable selling and administrative Total variable cost per unit $25 Pixed costs per month Fixed manufacturing overhead 5 315,000 Fixed selling and administrative 245.000 Total fixed cost per month $ 560,000 The product sells for $60 per unit. Production and sales data for July and August, the first two months of operations, follow: Unite Produced Units told July 17.500 15,000 August 19.500 20,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August Sales Cost of goods sold Gromargin delling and administrative expenses Not operating income July August $ 900,000 1,200,000 600,000 800,000 300,000 400,000 290.000 305,000 $10,000 $ 95,000 Required: 1. Determine the unit product cost under a. Absorption costing b. Variable costing w. vuuuUIC LUY. 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 Prepare variable costing income statements for July and August. August Denton Company Variable Costing Income Statement July Sales 900,000 Variable expenses: Variable cost of goods sold Variable selling and administrative expenses 0 0 900,000 0 Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses 0 Total fixed expenses Net operating income (loss) 0 900,000 $ $ 0 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating Incomes. (Enter any losses or deductions as a negative value.) August Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing not operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (108)