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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

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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 (e $42 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,197,000 798,000 399,000 307,000 $ 92,000 Year 2 $ 1,827,000 1,218,000 609,000 337,000 $ 272,000 $3 per unit variable: $250,000 fixed each year, The company's $42 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($432,000 - 24,000 units) Absorption conting unit product cost $ 9 10 5 18 $ 42 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

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