18 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: 5.65 points Sales ($62 per unit) Coat of goods sold ($37 per unit) Cross margin Selling and administrative expenses Net operating income Year 1 $ 1,056,000 629,000 425,000 297,000 $ 128,000 Year 2 $ 1,674,000 999,000 675,000 327,000 $ 348,000 eBook *$3 per unit variable: $246,000 fixed each year, The company's $37 unit product cost is computed as follows: References Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($286,000 22,000 units) Absorption conting unit product cont $ 10 12 2 13 $ 37 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27.000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost Required 1 Required 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minus Year 1 Year 2 Net operating income (loss) ences Required 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year... Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Variable conting net operating income (los) Year 2 Absorption costing net operating income