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 $ 4 9 2 2 $ 17 $ 63,000 166,000 $ 229,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced Units Sold 21,000 21,000 17,000 25,000 The company's Accounting Department prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin July $850,000 August $1,250,000 306,000 450,000 544,000 800,000 200,000 216,000 $ 344,000 $ 584,000 Selling and administrative expenses Net operating income 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.