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$)$ $ $1,037,000$ $ $1,647,000$

Cost of goods sold $($@ $$34$ per unit$)578,000918,000$

Gross margin $459,000729,000$

Selling and administrative expenses$*299,000329,000$

Net operating income $ $160,000$ $ $400,000$

$*$ $$3$ per unit variable; $$248,000$ fixed each year.

The company$$s $$34$ unit product cost is computed as follows:

Direct materials $ $6$

Direct labor $9$

Variable manufacturing overhead $1$

Fixed manufacturing overhead $($$$396,000-$: $22,000$ units$)18$

Absorption costing unit product cost $ $34$

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

Year $1$ Year $2$

Units produced $22,00022,000$

Units sold $17,00027,000$

Required:

Using variable costing, what is the unit product cost for both years?

What is the variable costing net operating income in Year $1$ and in Year $2?$

Reconcile the absorption costing and the variable costing net operating income figures for each year.