During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales ($62 per unit) Cost of goods sold ($34 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $251,000 fixed each year. The company's $34 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($312,000 + 24,000 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 24,000 19,000 24,000 29,000 $ 7 12 2 13 $ 34 Year 1 $ 1,178,000 646,000 Year 2 $ 1,798,000 986,000 532,000 308,000 $ 224,000 812,000 338,000 $ 474,000 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.