During Heaton Company$$s first two years of operations, it reported absorption costing net operating income as follows:

Year $1$ Year $2$

Sales $($@ $$60$ per unit$)$ $ $960,000$ $ $1,560,000$

Cost of goods sold $($@ $$40$ per unit$)640,0001,040,000$

Gross margin $320,000520,000$

Selling and administrative expenses$*300,000330,000$

Net operating income $ $20,000$ $ $190,000$

$*$ $$3$ per unit variable; $$252,000$ fixed each year.

The company$$s $$40$ unit product cost is computed as follows:

Direct materials $ $9$

Direct labor $10$

Variable manufacturing overhead $5$

Fixed manufacturing overhead $($$$336,000-$: $21,000$ units$)16$

Absorption costing unit product cost $ $40$

Production and cost data for the first two years of operations are: