During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,140,000 741,000 399,000 303,000 $ 96,000 Year 2 $ 1,740,000 1,131,000 609,000 333,000 $ 276,000 *$3 per unit variable: $246,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($432,000 + 24,000 units) Absorption costing unit product cost $ 7 10 4 18 $ 39 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