During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales @ $63 per unit) Cost of goods sold ( 538 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,134,000 684,000 450,000 299,000 $ 151,000 Year 2 $ 1,764,00 1,064,000 700,000 329,000 $ 371,00 53 per unit variable: $245,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($368,000 23,000 units) Absorption costing unit product cost 4 16 538 Production and cost data for the first two years of operations are: Units produced units sold Year 1 23,000 18,000 Year 2 23,000 20,000 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 27 3. Reconcile the absorption costing and the variable costing net operating income figures for each year