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 (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $247,000 fixed each year. The company's $32 unit product cost is computed as follows: Year 1 $ 1,054,000 544,000 510,000 298,000 212,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($264,000 + 22,000 units) Absorption costing unit product cost Units produced Units sold $ Production and cost data for the first two years of operations are: Year 1 22,000 17,000 Year 2 22,000 27,000 Year 2 $ 1,674,000 864,000 810,000 328,000 482,000 $ $ 7 11 2 12 $ 32 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.

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: - \$3 per unit variable; $247,000 fixed each year. The company's $32 unit product cost is computed as follows: Production and cost data for the first two years of operations are: 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