5 points 3 02:2133 During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses+ Net operating income. $3 per unit variable; $254,000 fixed each year. $ 1,080,000 $1,680,000 Year 1 Year 21 630,000 450,000 980,000 700,000 308,000 338,000 $142,000 $362,000 The company's $35 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($299,000 +23,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $10 10 2 13 $ 35 Units produced Units sold Required: Year 1 Year 2 23,000 23,000 18,000 28,000 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.