Problem 7-22 Variable Costing Income Statements; Income Reconciliation [LO7-1, LO7-2, LO7-3] 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 $ 6 10 2 1 $ 19 $ 120,000 163,000 $ 283,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Sold Units Produced July August 30,000 30,000 26,000 34,000 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 $1,404,000 August $ 1,836,000 572,000 832,000 748,000 1,088,000 189,000 197,000 $ 643,000 $ 891,000 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.