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 4 2 $ 19 $ 126,000 160,000 $ 286,000 The product sells for $47 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 Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: August Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. July $ 799,000 $ 1,175,000 391,000 575,000 408,000 194,000 600,000 210,000 $ 214,000 $ 390,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.