Problem 7-22 Variable Costing Income Statements; Income Reconciliation (L07-1, LO7-2, 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 cont per unit Fixed costs per month Pixed manufacturing overhead Pixed selling and administrative Total fixed cost per month 9 3 1 $ 18 $ 72,000 166,000 $ 238,000 5 The product sells for $49 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Unito Produced 18.000 18,000 Units Bold 14,000 22,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August Sales Cost of goods sold Cross margin Solling and administrative expenses Net operating income July $ 686,000 294,000 392,000 180,000 $ 212,000 August $ 1,078,000 462.000 616,000 188.000 $ 420,000 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. Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August 0 0 0 0 0 Net operating income (loss) $ 0 $ 0 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.) 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)