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

Year $1$ Year $2$

Sales $($@ $$61$ per unit$)$ $ $1,220,000$ $ $1,830,000$

Cost of goods sold $($@ $$41$ per unit$)820,0001,230,000$

Gross margin $400,000600,000$

Selling and administrative expenses$*312,000342,000$

Net operating income $ $88,000$ $ $258,000$

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

The company$$s $$41$ unit product cost is computed as follows:

Direct materials $ $10$

Direct labor $10$

Variable manufacturing overhead $3$

Fixed manufacturing overhead $($$$450,000-$: $25,000$ units$)18$

Absorption costing unit product cost $ $41$

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

Year $1$ Year $2$

Units produced $25,00025,000$

Units sold $20,00030,000$

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.