During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: $ Sales (@ $62 per unit) Cost of goods sold (@$45 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,116,000 810, 000 306, 000 304,000 $ 2,000 Year 2 1,736,000 1,260,000 476,000 334,000 142,000 $ *$3 per unit variable: $250,000 fixed each year. The company's $45 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($437,000 - 23,000 units) Absorption costing unit product cost $ 10 12 4 19 45 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 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