Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 4 Direct labor 11 Variable manufacturing overhead 4 Variable selling and administrative 3 Total variable cost per unit $ 22 Fixed costs per month: Fixed manufacturing overhead $ 63,000 Fixed selling and administrative 172,000 Total fixed cost per month $ 235,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July 21,000 17,000 August 21,000 25,000 The company’s Accounting Department has prepared the following absorption costing income statements for July and August: July August Sales $ 850,000 $ 1,250,000 Cost of goods sold 374,000 550,000 Gross margin 476,000 700,000 Selling and administrative expenses 223,000 247,000 Net operating income $ 253,000 $ 453,000 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.