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$)$ $ $1,140,000$ $ $1,740,000$

Cost of goods sold $($@ $$42$ per unit$)798,0001,218,000$

Gross margin $342,000522,000$

Selling and administrative expenses$*306,000336,000$

Net operating income $ $36,000$ $ $186,000$

$*$ $$3$ per unit variable; $$249,000$ fixed each year.

The company$$s $$42$ unit product cost is computed as follows:

Direct materials $ $9$

Direct labor $11$

Variable manufacturing overhead $3$

Fixed manufacturing overhead $($$$456,000-$: $24,000$ units$)19$

Absorption costing unit product cost $ $42$

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

Year $1$ Year $2$

Units produced $24,00024,000$

Units sold $19,00029,000$

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.