During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@$30 per unit) Gross margin Selling and administrative expenses Net operating income. $3 per unit variable; $250,000 fixed each year. The company's $30 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($231,000 21,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required: Year 1 Year 2 21,000 21,000 16,000 26,000 $7 10 2 11 $ 30 Year 1 $ 960,000 480,000 Year 2 $ 1,560,000 780,000 480,000 298,000 $ 182,000 780,000 328,000 $ 452,000 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.