Required: 1. Determine the unit product cost under absorption costing and variable costing. Unit Product Cost a. Absorption costing b. Variable costing 2. Prepare contribution format variable costing income statements for July and August Denton Company Variable Costing Income Statement July August Variable expenses: Total variable expenses 0 Fixed expenses: Total fixed expenses Net operating income (loss) $ OS 3. Reconcile the variable conting and absorption conting net operating income Reconciliation of Variable Costing and Abworption Costing Net Operating incomes August Variable costing net operating income (10) Add (deduct) fixed manufacturing over and cont deferred in (released from Inventory under absorption costing Absorption conting net operating income (0) 5 OS Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials 57 Direct labor 10 Variable manufacturing overhead 5 Variable selling and administrative 3 Total variable cost per unit 5.25 Fixed costs per month fixed manufacturing overhead $ 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: Unita Produced 17,500 17,500 July August The company's Accounting Department has prepared the following absorption costing income statements for July and August Units Sold 15,000 20,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net 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 2. Prepare variable costing income statements for July and August 3. Reconcile the variable costing and absorption costing net operating incomes