During Heaton Company's first two years of operations, It reported absorption costing net operating Income as follows: Year 1 Year 2 Sales ( $61 per unit) Cost of goods sold ( $33 per unit) Gross margin Selling and administrative expenses 976,eee 528,eee 448,000 1,586,eee 858,eee 728,eee 294,e00 324,00e $ \154,0ee Net operating income 404,eee $3 per unit varlable; $246,000 fixed each year. The company's $33 unit product cost Is computed as follows: $ 6 Direct materials Direct labor 11 Variable manufacturing overhead Fixed manufacturing overhead ($273,eee 3 21,e0e units) 13 $ 33 Absorption costing unit product cost Forty percent of fixed manufacturing overhead consists of wages and salarles, the remalnder consists of depreclation charges on production equipment and buildings Productlon and cost data for the first two years of operatons are: Year 1 Year 2 Units produced Units sold 21,000 16,000 21,eee 26,eee Required: 1. Using varlable costing, what Is the unit product cost for both years? 2. What Is the varlable costing net operating Income In Year 1 and In Year 2? 3. Reconclle the absorption costing and the variable costing net operating income figures for each year. mm