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 3 2 $ 18 $ 96,000 166,000 $ 262,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced July 24,000 August 24,000 Units Sold 20,000 28,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July August $940,000 400,000 $ 1,316,000 560,000 540,000 756,000 206,000 222,000 $ 334,000 $ 534,000 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.