Problem $6-22($Algo$)$ Variable Costing Income Statements; Income Reconciliation $[$LO$6-1,$ LO$6-2,$ LO$6-3]$

Denton Company manufactures and sells a single product. Cost data for the product are given:

Variable costs per unit:$$Direct materials$ $3$Direct labor$10$Variable manufacturing overhead$3$Variable selling and administrative$3$Total variable cost per unit$ $19$Fixed costs per month:$$Fixed manufacturing overhead$ $75,000$Fixed selling and administrative$169,000$Total fixed cost per month$ $244,000$

The product sells for $$54$ per unit. Production and sales data for July and August, the first two months of operations, follow:

$$Units ProducedUnits SoldJuly$15,00011,000$August$15,00019,000$

The company$$s Accounting Department prepared the following absorption costing income statements for July and August:

$$JulyAugustSales$ $594,000$$ $1,026,000$Cost of goods sold$231,000399,000$Gross margin$363,000627,000$Selling and administrative expenses$202,000226,000$Net operating income$ $161,000$$ $401,000$

Required:

Determine the unit product cost under:

Absorption costing.Variable costing.

Prepare variable costing income statements for July and August.

Reconcile the variable costing and absorption costing net operating incomes.