During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Salen te $61 per unit) Cost of goods sold ($32 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 Year 2 $ 1,220,000 $ 1,830,000 640,000 960,000 580,000 B70,000 309,000 339,000 $ 271,000 $ 531,000 12 2 11 $32 $3 per unit variable: $249,000 fixed each year. The company's $32 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($275,000 - 25,000 unite) Absorption coating unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 25,000 25,000 Units sola 20,000 30,000 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? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.