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Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable coat per unit Pixed costs per month Fixed

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Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable coat per unit Pixed costs per month Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 12 3 3 $ 23 $ 126,000 172,000 $ 298,000 The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 21,000 21,000 Unito Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing Income statements for July and August: Salon Cont of goods sold Gross margin Selling and administrative expenses Net operating income July $ 816,000 442,000 374,000 223,000 $ 151,000 August $ 1,200,000 650,000 550,000 247,000 $ 303,000 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

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