Check my work During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ( $62 per unit) Cost of goods sold (e $35 per unit) Gross margin Selling and administrative expenses * Year 1 $1,240,000 700,000 Year 2 $ 1,860,000 1,050,000 810,000 336,000 540,000 306,000 Net operating income $ 1234,000 474,000 $3 per unit variable; $246,000 fixed each year The company's $35 unit product cost is computed as follows: $ 9 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($325,000 25,000 units) 13 $ 35 Absorption costing unit product cost Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Year 1 Year 2 1 of 4 Next> Prev Course Descrintion (Suffolk Catalog): alls96 JUN