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

Year $1$ Year $2$

Sales $($@ $$62$ per unit$)$ $ $1,178,000$ $ $1,798,000$

Cost of goods sold $($@ $$36$ per unit$)684,0001,044,000$

Gross margin $494,000754,000$

Selling and administrative expenses$*305,000335,000$

Net operating income $ $189,000$ $ $419,000$

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

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

Direct materials $ $9$

Direct labor $10$

Variable manufacturing overhead $4$

Fixed manufacturing overhead $($$$312,000-$: $24,000$ units$)13$

Absorption costing unit product cost $ $36$

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:

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.