During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows Year 1 $1,178,e0e $1,798,eee Year 2 Sales (@ $62 per unit) Cost of goods sold ( $31 per unit)589,800899,80 Gross margin Selling and administrative expenses Net operating income 899,000 333,e00 566,00 589,000 303,e00 $1286,000 $3 per unit variable: $246.000 fixed each year The company's $31 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($336,e0024,008 units) Absorption costing unit product cost 14 $ 31 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 operatons are: ear ear 2 Units produced24,000 24,e 19,000 29,ee0 Units sold 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