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

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows Year1 Year 2 Sales (e $62 per unit) Cost of goods sold ( $39 per unit) Gross margin Selling and administrative expenses* Net operating income $ 1,116,000 1,736,000 702,000Lr092100U_ 414,000 644,000 303,000333,000 $\111,000 311,000 $3 per unit variable; $249,000 fixed each year. The company's $39 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($299,00023,000 units) Absorption costing unit product cost 10 13 3 13 $ 39 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings Production and cost data for the first two years of operations are: Units produced Units sold Year 1 Year 2 23,000 23,000 18,000 28,000 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. Required 1 Using variable costing, what is the unit product cost for both years? Unit product cost Required 2 Required 3 Required 1n ed2d 2 Required 3 What is the variable costing net operating income in Year 1 and in Year 2? (Loss a sign.) Year 1 Year 2 Net operating income (loss) Required 3 d1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Variable costing net operating income (loss) Absorption costing net operating income