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

Year $1$ Year $2$

Sales $($@ $$63$ per unit$)$ $ $1,071,000$ $ $1,701,000$

Cost of goods sold $($@ $$36$ per unit$)612,000972,000$

Gross margin $459,000729,000$

Selling and administrative expenses$*$Footnote asterisk $302,000332,000$

Net operating income $ $157,000$ $ $397,000$

$*$Footnote asterisk $$3$ per unit variable; $$251,000$ fixed each year.

The company$$s $$36$ unit product cost is computed as follows:

Direct materials $ $9$

Direct labor $9$

Variable manufacturing overhead $4$

Fixed manufacturing overhead $($$$308,000-$: $22,000$ units$)14$

Absorption costing unit product cost $ $36$

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