Problem 7-22 (Algo) Variable Costing Income Statements; Income Reconciliation (LO7-1, L07-2, L07-3] 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 $ 5 9 3 1 $ 18 $ 126,000 163,000 $ 289,000 The product sells for $51 per unit Production and sales data for July and August, the first two months of operations, follow: Units Produced 21,000 21,000 Units Sold 17,000 25,000 July August The company's Accounting Department has prepared the following absorption costing income statements for July and August July $ 867,000 301 000 August $ 1,275,000 57 A Sales CA FARAH Total fixed cost per month $ 289,000 The product sells for $51 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced 21,000 21,000 Units Sold 17,000 25,000 July August The company's Accounting Department has prepared the following absorption costing income statements for July and August Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July $ 867,000 391,000 476,000 180,000 $ 296,000 August $ 1,275,000 575,000 700,000 188,000 $ 512,000 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. Complete this question by entering your answers in the tabs below. 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 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a. Absorption costing b. Variable costing Required 2 > Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August Net operating income (loss) 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.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss)