During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Salen ( 562 per unit) Cost of goods sold ($38 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 Year 2 $ 1,116,000 5 1,736,000 684,000 1,064,000 432,000 672,000 308,000 338,000 $ 124,000 $ 334.000 *$3 per unit variable: $254.000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5437,000 - 23.000 units) Absorption costing unit product cont 3 19 $ 3B Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 Units sola 10,000 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 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using variable costing, what is the unit product cost for both years? Unit product cost $ 19 Required Required 2 > Required 1 Required 2 Required 3 What is the variable costing net operating Income In Year 1 and in Year 22 (Loss amounts should be indicated with a minus sign.) Year 1 Year 2 Net operating income (los) Required 1 Required 2 Required 3 Year 2 Reconcile the absorption costing and the variable costing net operating Income figures for each year. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Variable costing net operating income (loss) Add (deduct) foxed manufacturing overhead deferred in (released from) Inventory under absorption costing Absorption costing net operating income