During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (e $60 per unit) Cost of goods sold ($38 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,020,000 646,000 374,000 299.000 $ 75,000 Year 2 $ 1,620,000 1,026,000 594,000 329,000 $ 265,000 $3 per unit variable: $248,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct Labor Variable manufacturing overhead Fixed manufacturing overhead ($308,000 + 22,000 units) Absorption costing unit product cost $ 7 12 5 14 $ 38 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