During Heaton Companys first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $60 per unit) $ 960,000 $ 1,560,000 Cost of goods sold (@ $44 per unit) 704,000 1,144,000 Gross margin 256,000 416,000 Selling and administrative expenses* 303,000 333,000 Net operating income $ -47,000 $ 83,000 * $3 per unit variable; $255,000 fixed each year. The companys $44 unit product cost is computed as follows: Direct materials $ 9 Direct labor 13 Variable manufacturing overhead 3 Fixed manufacturing overhead ($399,000 21,000 units) 19 Absorption costing unit product cost $ 44 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 21,000 21,000 Units sold 16,000 26,000 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.