During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales ( 561 per unit) $ 1.093,000 5 1,708,000 Cost of goods sold ($36 per unit) 548,000 1. 008,000 Gross margin 450,000 700,000 Selling and administrative expenses 303,000 333,000 Net operating income $ 147,000 5 367,000 *$3 per unit variable: $249,000 fixed each year, The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (5368, 088 + 23,000 units) Absorption costing unit product, cost $7 11 2 16 $36 Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23,000 18,000 Year 2 23,000 28.000 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 What is the variable costing net operating income in Year 1 and in Year 2? (toss amounts should be indicated with a minus sign.) Year 1 75,000 $ Year 2 445.000 Net operating income (loss) $ Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 Year 2 Variable costing net operating income (loss) S 75,000 $ 445,000 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption 75,000 costing (75,000) Absorption costing net operating income $ 150,000 $ 370,000