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 (e $39 per unit) Gross margin Selling and administrative expenses. Net operating income Year 1 $1,116,000 702,000 414,000 299,000 $ \115,0001 Year 2 $1,736,000 1.092,000 644,000 329,000 $ 315,000 *$3 per unit variable: $245,000 fixed each year, The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($391,000 + 23,000 units) Absorption costing unit product cost 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 operatons are: Units produced Units sold Year 1 23.000 30.000 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 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year