During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: rded Sales ($64 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $1,216,000 665,000 551,000 309,000 $ 242,000 Year 2 $ 1,856,000 1,015,000 841,000 339,000 $ 502,000 $3 per unit variable: $252,000 fixed each year. The company's $35 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 $ 7 10 5 13 $ 35 Forty percent of fixed manufacturing overhead consists of wages and salaries: the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: Units produced Units sold Year 1 24,000 19,000 Year 2 24,000 29,000 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