During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (e $62 per unit) Cost of goods sold (e $41 per unit) Gross margin Selling and administrative expenses. Net operating income Year 1 $ 1,054,000 697.000 357,000 300,000 $ 57,000 Year 2 $ 1,674,000 1,107,000 567,000 330,000 $ 237,000 $3 per unit variable: $249,000 fixed each year. The company's $41 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($374,000 + 22,000 units) Absorption costing unit product cost $ 10 9 5 17 $ 41 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 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