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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (e $63 per unit) Cost of goods

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (e $63 per unit) Cost of goods sold (e $40 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,134,000 720,000 414,000 306,000 $ 108,000 Year 2 $ 1,764,000 1,120,000 644,000 336,000 $ 308,000 $3 per unit variable; $252,000 fixed each year. The company's $40 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($460,000 - 23.000 units) Absorption conting unit product cost 20 $ 40 Production and cost data for the first two years of operations are: Units produced Units sold Year 23,000 10,000 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

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